Community Trust Bancorp Inc.
Annual Report 2019

Plain-text annual report

2019 ANNUAL REPORT Cover Printed on Recycled Paper Your Company “We are committed to increasing shareholder value by operating our community banking model with the core values of fairness, respect, and integrity.” -Mission Statement Another Year of Record Earnings We are pleased that 2019 was once again a year of record earnings for your Company, Community Trust Bancorp, Inc. Your Company continues to operate with a conservative, efficient model of traditional community banking, which has been the foundation of our customer service for more than 116 years and has driven our long history of earnings. We recognize that there are significant challenges in the current economic climate. Since 1903, we have successfully met many such challenges and will do so again. With our focus on community banking, we work to serve local consumers, businessmen and businesswomen. That is just the beginning of our service; however, we work, through our donations and volunteered time, to build more prosperous, healthy, and educated individuals and communities wherever our offices are located. We are blessed to be a part of the lives of individuals and families, businesses and civic organizations, and a myriad of other educational and community-based associations. We are cognizant, as a community leader, of the responsibility that we have to be good stewards of the trust placed in us by all those who reside in the communities in which we live and work. We proudly serve each of our four constituents: shareholders, customers, employees, and communities. Our work for any one of these constituents benefits all of them. We look forward to this next decade, continuing to build communities, built on trust. Net Income (in thousands) 2019 2018 2017 2016 2015 $64,540 $59,228 $51,493 $47,346 $46,432 $0 $10,000 $20,000 $30,000 $40,000 $50,000 $60,000 $70,000 1 To Our Shareholders Dear Shareholders Your Company continues to operate with a strong financial performance allowing us to provide a strong dividend to our shareholders, provide competitive products and services to our customers, provide good benefits to our 1,000 employees and continue to support our communities and organizations within our communities to provide a better place for our employees and customers to live. For over 116 years, we have focused on all four of our constituents…our shareholders, customers, employees, and communities. We are pleased to share in your 2019 Annual Report some of the things we do to support our constituents. th Your Company achieved our 5 consecutive year of record earnings with net income of $64.5 million and basic earnings per share of $3.64. This performance represents a 1.49% return on average assets and a 10.84% return on average equity. The Company’s earnings were positively impacted $0.15 per share or $2.7 million by changes in Kentucky's tax laws converting financial institutions from a franchise taxpayer to a corporate income taxpayer beginning in 2021 and the related deferred tax adjustments. For more detailed information, see our Management’s Discussion and Analysis of Financial Condition and Results of Operations in our annual report on Form 10-K for the year ended December 31, 2019. Jean R. Hale Chairman, President and CEO In July 2019, the Board of Directors approved the 39 consecutive increase in cash dividends to shareholders increasing the quarterly cash dividend by 5.56% to $0.38 per share from $0.36 per share. At December 31, 2019, our annualized cash dividend yield to shareholders was 3.26% and our dividend payout ratio was 40.7%. The earnings of the Company not paid to shareholders as cash dividends are reflected in the 9.0% increase in shareholders’ equity to $614.9 million from $564.2 million at December 31, 2018. Retained earnings are utilized for the continued growth of your Company to increase its earnings capacity long term. th The market price of CTBI stock increased 17.7% during 2019 as we had another year of strong financial performance and the U.S. stock market reacted positively to the continuing growth of the U.S. economy, although at a slower pace. Unfortunately, during the first months of 2020, the volatility within the stock market has increased, as there is significant uncertainty of the impact on the U.S. and international economies due to the coronavirus outbreak. The stock market has experienced declines in pricing, including CTBI. The closing price of CTBI stock on December 31, 2019 was $46.64 and our closing price on March 10, 2020 was $35.38, a 24% decline. The Federal Reserve has demonstrated and indicated its continued commitment to support the U.S. economy as the virus continues to spread throughout the U.S. and internationally, impacting people’s lives and many components of economic activity. Economic Conditions Within Our Markets Economic conditions nationally and in the markets we serve in Kentucky, West Virginia, and Tennessee continued growing during 2019, although at a slower pace. Although the economy continued to grow and inflation was controlled, the Federal Reserve felt the need to reduce interest rates three times during the last five months of 2019 to ensure that the U.S. economy remained on a positive growth trajectory and inflation was within their targeted range. With the emergence of the coronavirus in 2020, the Federal Reserve reduced interest rates by 50 basis points on March 3, 2020 and has indicated they will take necessary future actions to support the U.S. economy. These four rate reductions have had a significantly negative impact on the net interest margins of financial institutions. The reduction in our net interest margin has a direct impact on our largest source of income, net interest income. 2 Economic conditions within most regions of Kentucky have continued to be positive with low unemployment rates and stable business and consumer activity. Financial institutions continue to operate in a highly competitive market with both strong bank and non-bank competition for loans. The improvement has been less in our eastern and northeastern Kentucky regions than in our central and south central regions. Job creation and out migration of people for employment opportunities continues to be a challenge within the eastern and northeastern regions. We are actively working in our communities by providing financial support and volunteerism to improve economic conditions. Operational Highlights During 2019, your management continued to focus on the organic growth of your Company. The total assets of your Company reached $4.4 billion this year, increasing $164.4 million from 2018. We continue to operate in a highly competitive environment for both loans and deposits. Our loan portfolio grew $40 million, a 1.2% increase from year-end 2018, while our deposits, including repurchase agreements, grew $93.8 million, or 2.7%, during the same time period. As the Federal Reserve lowered interest rates three times in 2019, we saw a decline in our net interest margin of 6 basis points to 3.60% from the 3.66% for the year ended 2018. Your management team continued its focus on improving the asset quality of the Company’s loan portfolio and reducing its level of foreclosed properties. Although some of our credit metrics increased during 2019 (loans 90+ days past due and nonaccrual loans), our net charge-offs for 2019 of $5.6 million were a reduction from the $6.4 million of 2018. Our level of foreclosed properties saw a meaningful decline of $7.8 million to $19.5 million from the $27.3 million at year-end 2018. Strong Financial Performance We believe the consistently strong financial performance of your Company and our community banking business model, supporting our four constituents, continues to demonstrate why an investment in CTBI stock is considered a long-term core value investment. There has been and continues to be significant volatility within the stock market. The 5-year cumulative total return of CTBI stock has underperformed the NASDAQ Stock Market and the NASDAQ Bank Stock Index as of December 31, 2019. Stock price movements are generally reflective of investor views of the current economy or their expectations for future economic conditions, as well as sectors within the economy. Our strong history of financial performance can be attributed to many things. Significant among these are the decision to manage your Company using a community banking business model, the strength and dedicated service of our directors, a highly qualified management team and their commitment to the execution of our strategic plan, and the hard work and dedication of our 1,000 employees. We believe challenges provide opportunities, and with our strong foundation and 116 years of experience, we have a long history of seizing opportunities for financial success. We are focused on the success of your Company. Our Board of Directors, Management, and Employees are honored to continue serving our constituents..….Our Shareholders, Our Customers, Our Employees, and Our Communities. Your loyalty and support are invaluable to the success of your Company! Jean R. Hale Chairman, President and CEO 3 2019 Annual Report (in thousands except ratios, per share amounts, and employees) Net income Basic earnings per share Diluted earnings per share Cash dividends per share Average shares outstanding For the Year 2019 2018 Percentage Change $ 64,540 3.64 3.64 1.48 17,724 $ 59,228 3.35 3.35 1.38 17,687 % 9.0 8.7 8.7 7.2 0.2 % At Year End 2019 2018 Percentage Change Total assets Earning assets Deposits, incl. repurchase agreements Loans Allowance for loan and lease losses Shareholders’ equity Book value per share Market price per common share Common shares outstanding Full time equivalent employees $4,366,003 4,075,600 3,632,489 3,248,664 35,096 614,886 34.56 46.64 17,793 1,000 $4,201,616 3,908,852 3,538,662 3,208,638 35,908 564,150 31.81 39.61 17,733 978 % 3.9 4.3 2.7 1.2 ) 2.3 9.0 8.6 17.7 ( % 0.3 2.2 Significant Ratios 2019 2018 Percentage Change For the year Return on average assets Return on average common equity Net interest margin Net charge-offs to average loans Efficiency ratio At year end Capital ratios: Equity to assets Tier 1 leverage Common equity Tier 1 Tier 1 capital Total capital Allowance to net loans Allowance to nonperforming loans % 1.49 10.84 3.60 0.18 60.70 % 14.08 14.01 17.18 18.94 20.05 1.08 104.39 % 1.41 10.83 3.66 0.20 60.17 % 13.43 13.51 16.27 18.12 19.29 1.12 162.73 % 5.7 0.1 ) ( 1.6 ) ( 10.0 0.9 % 4.8 3.7 5.6 4.5 3.9 ) ( 3.6 ) ( 35.9 4 Financial Highlights Earnings Per Share 2019 2018 2017 2016 2015 $3.64 $3.35 $2.92 $2.70 $2.66 $0.00 $0.50 $1.00 $1.50 $2.00 $2.50 $3.00 $3.50 $4.00 Dividends Per Share 2019 2018 2017 2016 2015 $1.48 $1.38 $1.30 $1.26 $1.22 $0.00 $0.20 $0.40 $0.60 $0.80 $1.00 $1.20 $1.40 $1.60 Noninterest Income (in thousands) 2019 2018 2017 2016 2015 2019 2018 2017 2016 2015 $50,184 $51,952 $48,508 $48,441 $46,809 $0 $10,000 $20,000 $30,000 $40,000 $50,000 $60,000 Efficiency Ratio 60.70% 60.17% 58.66% 58.54% 58.20% 0.00% 10.00% 20.00% 30.00% 40.00% 50.00% 60.00% 70.00% 5 Financial Highlights (in thousands except per share data) 2019 2018 Percentage Change Consolidated Statements of Income Year Ended December 31 Interest income Interest expense Net interest income Provision for loan losses Noninterest income Noninterest expense Income before income taxes Income tax expense Net Income Cash dividends per share Book value per share $ $ $ 185,398 40,513 144,885 4,819 50,184 118,258 71,992 7,452 64,540 1.48 34.56 $ $ $ 171,450 29,295 142,155 6,167 51,952 117,398 70,542 11,314 59,228 1.38 31.81 Average shares outstanding 17,724 17,687 % 8.1 38.3 1.9 ) ( 21.9 ) ( 3.4 0.7 2.1 ) ( 34.1 9.0 % 7.2 8.6 0.2 % (in thousands) Assets Consolidated Balance Sheets At December 31 2019 2018 Percentage Change Cash and deposits in other banks Federal funds sold Securities Loans, net of allowance Other assets $ 264,928 - 602,314 3,213,568 285,193 $ 144,270 1,100 595,568 3,172,730 287,948 Total Assets $4,366,003 $4,201,616 Liabilities and Shareholders’ Equity Deposits Repurchase agreements Federal funds purchased Advances from Federal Home Loan Bank Long-term debt Other liabilities $ 3,405,572 226,917 7,906 415 57,841 52,466 $ 3,305,950 232,712 1,180 436 59,341 37,847 Total Liabilities 3,751,117 3,637,466 Shareholders’ Equity 614,886 564,150 Total Liabilities and Shareholders’ Equity $4,366,003 $4,201,616 % 83.6 ) ( 100.0 1.1 1.3 ) ( 1.0 3.9 % 3.0 ) ( 2.5 570.0 ) ( 4.8 ) ( 2.5 38.6 3.1 9.0 3.9 6 Total Assets (in thousands) 2019 Annual Report $4,366,003 $4,201,616 $4,136,231 $3,932,169 $3,903,934 $0 $1,000,000 $2,000,000 $3,000,000 $4,000,000 $5,000,000 Shareholders’ Equity (in thousands) $614,886 $564,150 $530,699 $500,615 $475,583 $0 $100,000 $200,000 $300,000 $400,000 $500,000 $600,000 $700,000 Total Loans (in thousands) $3,248,664 $3,208,638 $3,122,940 $2,938,371 $2,873,961 $0 $1,000,000 $2,000,000 $3,000,000 $4,000,000 Nonperforming Assets to Loan and Foreclosed Properties 1.62% 1.53% 1.92% 2.13% 2.38% 2019 2018 2017 2016 2015 2019 2018 2017 2016 2015 2019 2018 2017 2016 2015 2019 2018 2017 2016 2015 0.00% 0.50% 1.00% 1.50% 2.00% 2.50% 3.00% 7 2019 Annual Report “ We are cognizant... of the responsibility that we have to be good stewards.... ” 8 Shareholders Our directors, officers, and staff focus on providing a stable and competitive return for our investors year after year by focusing on maintaining the highest level of operating performance necessary to create shareholder value. Our history of sharing our success with our shareholders continued during 2019, as we increased the cash dividend to our shareholders for the 39 consecutive year. Additionally, at year-end 2019 our stock had experienced a 17.7% increase in price, compared to year-end 2018. th While increasing our cash dividend to our shareholders, we continued to grow our shareholders’ equity to $614.9 million at December 31, 2019, a 9.0% increase from the $564.2 million at December 31, 2018. Our annualized dividend yield to shareholders as of December 31, 2019 was 3.26%, and the five-year compound growth rate of cash dividends per share was 4.6%. The five-year compound growth rate of earnings per share was 7.8% at December 31, 2019, as Community Trust achieved record earnings of $64.5 million compared to the 2018 record earnings of $59.2 million. Community Trust Bancorp, Inc. continues to maintain a significantly higher level of capital than required by regulators in order to be designated as “well-capitalized.” To be “well-capitalized,” banks must maintain a Tier 1 leverage ratio of no less than 5.0%, a common equity Tier 1 capital ratio of no less than 6.5%, a Tier 1 risk-based ratio of no less than 8.0%, and a total risk-based ratio of no less than 10.0%. Our ratios as of December 31, 2019 were 14.01%, 17.18%, 18.94%, and 20.05%, respectively, all exceeding the threshold for meeting the definition of “well-capitalized.” On December 31, 2019, our tangible common equity/tangible assets ratio remained strong at 12.78%. Our stock is included in the Russell 2000 Index of small cap companies, providing us with a good benchmark for comparing our stock’s performance. During the 10-year period ending December 31, 2019, CTBI produced an annualized return of 11.61%, while the Russell 2000 Index produced an annualized return of 11.81%. Our stock is traded on the prestigious NASDAQ Global Select Market (a founding stock selection) and is also one of 50 founding stocks of the NASDAQ’s Dividend Achievers Index. An investment in CTBI stock on December 31, 2014 would have provided an annualized total return of 8.4% as of December 31, 2019. Book Value Per Share 2019 2018 2017 2016 2015 $34.56 $31.81 $30.00 $28.40 $27.12 $0.00 $5.00 $10.00 $15.00 $20.00 $25.00 $30.00 $35.00 $40.00 9 Customers Since 1903, we have worked hard to meet the financial product and service needs of our customers – individuals, businesses, and organizations – by helping them achieve their financial goals. In 2019, Community Trust served more than 300,000 customers with a wide variety of banking products and services designed to fit each customer’s needs. th In 2019, for the 11 consecutive year, we were recognized by the Small Business Administration (SBA) as the top community bank SBA lender in the Commonwealth of Kentucky based on the total number of loans. During this time, Community Trust has funded more than 930 SBA loans, providing access to over $200 million for small businesses in the region. We were also recognized by the SBA as the top third-party SBA lender in the state of Tennessee for the second consecutive year. Community Trust also offers USDA guaranteed loans, along with an entire suite of commercial loans and leases, mortgage loans, and consumer loans. Community Trust participates in several programs through the Federal Home Loan Bank of Cincinnati, Ohio to fund affordable housing projects in partnerships with organizations like Habitat for Humanity and HOMES, Inc. of Letcher County, Kentucky. We also make grant funds available directly to low and moderate income families who qualify for the “Welcome Home” program. For eight months during 2019, Community Trust offered qualifying mortgage loan customers $500 off closing costs. Outstanding customer service is our goal, and we are committed to bringing new and innovative technological advances to our customers. In the past several years we have expanded our menu of mobile and online banking services to include Apple Pay, Google Pay, Samsung Pay, Consumer Mobile Banking for Tablets, Business Mobile Banking for Smartphones and Tablets, and Business Check Remote Deposit Capture. We will continue to work to offer our customers new products and services that will enhance their banking experiences. Our deposit-related products and services include certificates of deposits, savings accounts, online banking and online bill payment (at www.ctbi.com), mobile banking, commercial account remote deposit capture, and cash management services. We offer our customers convenient access to their accounts through our 85 ATMs and additional free access to more than 100 ATMs through our network arrangements. Please visit our website at https://www.ctbi.com/ctbi/about-us/atm-location-listing for a complete listing of our ATM locations. Our trust and wealth management professionals are dedicated to helping individuals and businesses identify the right products and services to meet their unique needs. We offer customers a full line of wealth and trust management, estate planning, and retirement planning services, in addition to full service brokerage and life insurance products. We are pleased to serve our customers with our extensive, convenient electronic banking services, as well as through our 79 banking offices and five trust offices in Kentucky, West Virginia, and Tennessee. 10 “ Outstanding customer service is our goal.... ” 11 2019 Annual Report “ Our employees contributed over 2,500 community service hours.... ” 12 Employees The success of our employees means success for Community Trust. We recognize the long-term value of a highly skilled, dedicated workforce, with an average tenure of 10 years. We are committed to providing our employees with opportunities for personal and professional growth by providing reimbursement of educational expenses, encouraging attendance at seminars and in-house training programs, and sponsoring memberships in local civic organizations. Our employees recognize the long-term benefit of working with our organization as evidenced by the 175 employees who have 20 years or more of service. Our employees participated in numerous coaching, training, and educational programs throughout the year. Additionally, Community Trust continues to make online training available to employees; as a result, over 1,000 employees completed 63 different compliance and technical skill training online courses during 2019 through our Regulatory University system. Employees also had an opportunity during 2019 to utilize two new programs that provide skill development online with over 8,000 varied courses, including topics in banking, finance, computers, customer service, sales, management, and personal skills such as time management, project management, and communication skills. Our training department facilitated 199 classes internally with over 2,000 participants. Twelve employees worked on their skill development through attending secondary education courses; these were funded through our Educational Assistance Program. Ninety-six employees attended at least one external seminar or workshop. Community Trust offers its employees competitive compensation, as well as a highly competitive benefits package which includes health insurance, life insurance, retirement benefits, education reimbursement programs, and incentive plans. Community Trust is proud to have paid in support of these programs in excess of $59 million. We actively support our employees with a wellness program. Since beginning the program in 2004, participating employees have experienced improvements in preventing cardiovascular disease, cancer, and diabetes. Many of our employees have experienced decreases in elevated medical risk factors, including alcohol consumption, tobacco usage, physical inactivity, high stress, high cholesterol, and high blood pressure. We recognize the hard work and dedication of our employees by providing opportunities to earn cash bonuses and win awards for top achievement. In February 2020, we held our 21 annual “Pinnacle of Success” awards banquet where we recognized 62 employees for their outstanding performance in business development and service during the prior year. We have included the names of those employees, as well as the offices, markets, and regions recognized, following the Branch Locations listing on page 20. st The success of our employees means success for your Company. Our employees’ commitment to the mission of your Company and our constituents is evidenced by their ownership of the Company’s stock. Through their 401(k) and ESOP plans, our employees collectively own 1.2 million shares, or 6.5%, of Community Trust Bancorp, Inc. stock, making them one of our largest shareholders. In 2019, Community Trust Bancorp, Inc. contributed $​2.8 million to these plans. 13 Communities We have helped our friends and neighbors fulfill their financial dreams for more than 116 years. By doing so, we have helped to build better communities. The progress and improvements upon which we focus are in the areas of jobs and the economy, education and health care, and overall quality of life. Our continuing support of our communities, both financially and through the volunteer service of our employees, has helped build great places to live for our customers and fellow employees. During 2019, we donated $1.1 million to community organizations involved in a wide variety of civic activities, including economic development, affordable housing, job creation, education, cultural enrichment, medical research, and health care. Our employees contributed over 2,500 community service hours to these organizations during 2019, with over 1,500 of those hours having a community development purpose. We also made investments totaling nearly $10 million that funded various community development projects. In addition, we have funded over $58 million in loans for community development projects. Community Trust employees provide leadership, monetary support, and countless volunteer hours to many exceptional local community organizations in all of the communities we serve. Our employees are active in a wide variety of community organizations, including United Way, YMCA, American Cancer Society’s Relay For Life, American Red Cross, Habitat for Humanity, Kentucky Blood Center, Diabetes Coalition, Judi’s Place For Kids, March of Dimes, little league sports programs, Boy and Girl Scouts of America, The Salvation Army, volunteer fire departments, home realtor and builder organizations, elementary and high schools, and independent and state supported colleges and universities. Community Trust employees actively participate in the leadership of a wide variety of organizations by serving on their boards and attending conferences and workshops. In 2019, Community Trust continued to actively support SOAR (Shaping Our Appalachian Region), including donating office space for a rental fee of one dollar per year. We continue supporting One East Kentucky, Ashland Alliance, and numerous local chambers of commerce to expand job opportunities; enhance the economy of the region; encourage innovation, entrepreneurship, geographic cooperation, and a diversified workforce; improve the quality of life of our citizens; and support all those working to achieve these goals. Community Trust’s commitment to the communities in which we work and live is significant. We will continue working to improve the lives of our fellow citizens and the quality of life in the cities, towns, and neighborhoods which we share. CTBI Community Financial Support 2019 2018 2017 2016 2015 $1,068,000 $1,041,000 $1,150,000 $904,000 $854,000 14 11 $0 $200,000 $400,000 $600,000 $800,000 $1,000,000 $1,200,000 $1,400,000 2019 Annual Report “ Community Trust employees actively participate in the leadership of a wide variety of organizations... ” 15 Executive Committee JEAN R. HALE Chairman, President and CEO Community Trust Bancorp, Inc. Chairman Community Trust Bank, Inc. and Community Trust and Investment Company MARK A. GOOCH Executive Vice President and Secretary Community Trust Bancorp, Inc. Director, President and CEO Community Trust Bank, Inc. Director and Vice President Community Trust and Investment Company ANDY WATERS Executive Vice President Community Trust Bancorp, Inc. Director, President and CEO Community Trust and Investment Company JAMES B. DRAUGHN Executive Vice President Community Trust Bancorp, Inc. Executive Vice President/Operations Community Trust Bank, Inc. JAMES J. GARTNER Executive Vice President Community Trust Bancorp, Inc. Executive Vice President/ Chief Credit Officer Community Trust Bank, Inc. C. WAYNE HANCOCK II Executive Vice President Community Trust Bancorp, Inc. Executive Vice President/ Senior Staff Attorney Community Trust Bank, Inc. * STEVEN E. JAMESON Executive Vice President Community Trust Bancorp, Inc. Executive Vice President/Chief Internal Audit & Risk Officer Community Trust Bank, Inc. ANDREW JONES Executive Vice President Community Trust Bancorp, Inc. Executive Vice President/ Northeastern Region President Community Trust Bank, Inc. LARRY W. JONES Executive Vice President Community Trust Bancorp, Inc. Executive Vice President/ Central Kentucky Region President Community Trust Bank, Inc. RICHARD W. NEWSOM Executive Vice President Community Trust Bancorp, Inc. Executive Vice President/ Eastern Region President Community Trust Bank, Inc. RICKY D. SPARKMAN Executive Vice President Community Trust Bancorp, Inc. Executive Vice President/South Central Region President Community Trust Bank, Inc. KEVIN J. STUMBO Executive Vice President, CFO and Treasurer Community Trust Bancorp, Inc. Executive Vice President/CFO Community Trust Bank, Inc. Vice President Community Trust and Investment Company 16 * Non-voting Member Boards of Directors * ** *** JEAN R. HALE Chairman, President and CEO Community Trust Bancorp, Inc. Chairman Community Trust Bank, Inc. and Community Trust and Investment Company ** *** MARK A. GOOCH Executive Vice President and Secretary Community Trust Bancorp, Inc. Director, President and CEO Community Trust Bank, Inc. Director and Vice President Community Trust and Investment Company *** ANDY WATERS Executive Vice President Community Trust Bancorp, Inc. Director, President and CEO Community Trust and Investment Company * *** CHARLES J. BAIRD President Baird & Baird, P.S.C. Pikeville, Kentucky * NICK CARTER Private Investor Lexington, Kentucky ** DAVID E. COLLINS Managing Partner Collins & Slone, LLP Pikeville, Kentucky * FRANKLIN H. FARRIS, JR. Owner Farris Advisory Services, LLC Louisville, Kentucky *** E.B. LOWMAN II Chairman and CEO Cardinal Management Ltd. Ashland, Kentucky ** *** EUGENIA CRITTENDEN “CRIT” LUALLEN Former Lt. Governor Commonwealth of Kentucky Frankfort, Kentucky ** MICHELLE MATTHEWS President Childers Oil/Double Kwik Whitesburg, Kentucky JAMES E. MCGHEE II President Three JC Investments, LLC Pikeville, Kentucky FRANKY MINNIFIELD President Minnifield Enterprize, Inc. Lexington, Kentucky M. LYNN PARRISH President Marwood Land Company, Inc. Pikeville, Kentucky * ANTHONY W. ST. CHARLES President and CEO The St. Charles Group, LLC Cincinnati, Ohio CHAD C. STREET DMD, MD Owner and President East Kentucky Oral & Maxillofacial Surgery Pikeville, Kentucky Boards of Directors Community Trust Bancorp, Inc. Community Trust Bank, Inc. Community Trust and Investment Company 17 Advisory Board Members Eastern Region Northeastern Region South Central Region Richard Newsom Regional President Andrew Jones Regional President Central Region Larry W. Jones Regional President Lexington Versailles Pikeville* Ashland Billie Dollins Market President William Brett Keene Market President Andrew Jones Regional President Robert Cleveland John Cook Jack Givens Phil Huddleston Alice Kiviniemi William Klier Rodney Mitchell Billy Van Pelt Mark Wainwright, M.D. Winchester David Wills Market President Thomas R. Goebel Carl E. Jennings Robert M. Powe, Jr. David W. Underhill Gardner D. Wagers Floyd/Knott/Johnson* David Tackett Market President Hazard Janice Brafford-King Market President William Bettinazzi Frances Feltner Meriwether W. Hall Charles Housley Syamala H. K. Reddy, M.D. Jeff Sandlin Tim Short Alan Dale Williams Tug Valley Duanne Thompson Market President William F. Blackburn III James H. Caines Harold Davis Timothy A. Hatfield Philip Haywood John Mark Hubbard Paul E. Pinson Whitesburg Reed Caudill Market President L.M. Mike Caudill Bill Joe Collier ++ Sandra Hogg Sam W. Quillen, Jr., D.M.D. Pauline C. Ritter-Combs E. B. Lowman II E. B. Lowman III John McMeans Ann Perkins James C. Williams Advantage Valley Allen Burner Market President Carl Midkiff Christopher J. Plybon Julian Saad Steve Smith Flemingsburg Emery O. Clark III Market President Michael A. Boyd, M.D. Steve Humphries Duane Lowe T. Scott Perkins, D.M.D. Regina Rose Frank Vice, D.V.M. Summersville Jeff Lilly Market President Paul Buechler Ellis S. Frame III David Michael Hughes Marshall Robinson Larry W. Jones Regional President James C. Baughman, Jr. Robert A. Branham Anne Gay Combs C. Glen Combs Jenny Dulworth-Albert James Keeton III Robert Kelly James H. Schrader Daryl Smith Danville/Harrodsburg David Maynard Market President Bob Allen Scott Burks Bob Davis Bruce Harper James G. Ingram Alvis Johnson Myrna Miller Larry Scott, M.D. Walter “Skip” Stocker Mt. Sterling Jody Oney Market President Byron Amburgey Marcus Shane Back Jeff Brother Reid Evans Brigitte Danielle King, M.D. Angela Patrick James R. Staton Richmond Tim Houck Market President Jeannette Crockett Alison Emmons David Fernandez James H. Howard Elizabeth McCarty David McFaddin Randall Stone * These markets are served by the Community Trust Bank, Inc. Board of Directors. Community Trust would like to offer our sincere appreciation for the commitment of Conrad Troutman and Bill Joe Collier to our Company and their communities. + Deceased 11/27/2019 ++ Deceased 1/26/2020 18 Ricky Sparkman Regional President Campbellsville Ricky Sparkman Regional President Barry Bertram Eddie Hazelwood Jerry Russell John Waldrop LaFollette Rhonda Longmire Market President George Ellison James C. Farris, M.D. Marvin Minton Peggy Payne Tom Robards Conrad Troutman + Robert L. Woodson III Middlesboro Rhonda Longmire Market President Marcum Brogan Meredith J. Evans, M.D. Keith A. Nagle Mt. Vernon Betty Frederick Market President Martha Cox Connie Hunt Gary W. Mink Tommy Mink Williamsburg Jamie Harrison Market President E. L. Ballou, D.M.D. Ray F. Bryant Joseph E. Early, Sr. Paul Estes Dallas B. Steely Mark S. Stephens Lonnie D. Walden Shareholder Information Corporate Address Dividend Reinvestment Community Trust Bancorp, Inc. offers its shareholders an automatic dividend reinvestment program. The program enables shareholders to reinvest their dividends in shares at the prevailing market price. For more information, contact us at: Community Trust Bancorp, Inc. c/o Broadridge Corporate Issuer Solutions, Inc. P.O. Box 1342 Brentwood, NY 11717-0718 866.232.3034 shareholder@broadridge.com Form 10-K CTBI’s annual report on Form 10-K filed with the Securities and Exchange Commission is available without charge on our website at www.ctbi.com or by writing: Community Trust Bancorp, Inc. Jean R. Hale Chairman, President & CEO P.O. Box 2947 Pikeville, KY 41502-2947 Current Analyst Coverage Raymond James and Associates, Inc. Sandler O’Neill & Partners, LP Community Trust Bancorp, Inc. 346 North Mayo Trail P.O. Box 2947 Pikeville, KY 41502-2947 606.432.1414 www.ctbi.com Notice of Annual Meeting The annual meeting of the shareholders will be held at 10:00 a.m. on April 28, 2020 at: Community Trust Bancorp, Inc. 346 North Mayo Trail Pikeville, Kentucky Transfer Agent Inquiries relating to shareholder records, stock transfers, changes of ownership, changes of address, and dividend payments should be sent to the transfer agent at: Broadridge Corporate Issuer Solutions, Inc. P.O. Box 1342 Brentwood, NY 11717-0718 866.232.3034 720.358.3637 (International) shareholder@broadridge.com Inquiries may also be directed to Community Trust Bancorp, Inc.’s Stock Transfer Administrator, Marilyn Justice, at: Community Trust Bank, Inc. P.O. Box 2947 Pikeville, KY 41502-2947 606.437.3279 800.422.1090, ext. 3279 (Toll Free) justicma@ctbi.com 19 Branch Locations Central Region Danville Danville Main Danville Manor Harrodsburg 462 W. Main St. 1560 Hustonville Rd. 570 Chestnut St. 859-239-9200 859-239-9460 859-734-4354 Richmond Eastern Bypass Richmond Main Berea North 860 Eastern Bypass 128 W. Main St. 525 Walnut Meadow Rd. 859-624-4622 859-623-2747 859-985-0561 * Lexington Vine Street Beaumont Hamburg Leestown Pasadena Richmond Road Mt. Sterling Mt. Sterling Main Mt. Sterling North 100 E. Vine St. 901 Beaumont Centre Pkwy. 2417 Sir Barton Way 109 Louie Place 185 Pasadena Dr. 3090 Richmond Rd. 859-389-5350 859-223-1111 859-264-1938 859-258-2659 859-313-5425 859-269-0164 110 N. Maysville St. 196 Evans Dr. 859-497-6900 859-497-6970 * Versailles Versailles Main Woodford Plaza Frankfort East Frankfort West Georgetown Walmart 101 N. Main St. 470 Lexington Rd. 427 Versailles Rd. 1205 S. Hwy. 127 112 Osbourne Way 859-879-5400 859-879-5480 502-848-0913 502-696-0720 502-863-4693 Winchester Winchester Main Winchester Plaza 120 S. Main St. 125 Winchester Plaza 859-745-7200 859-745-7220 Floyd/Knott/Johnson Allen Floyd County Paintsville Walmart Knott County 6424 KY Rt. 1428 161 S. Lake Dr. 470 N. Mayo Trl. 107 W. Main St. 1665 Combs Rd. 100 Citizens Ln. 101 Village Ln. Hazard Airport Gardens Black Gold Hazard Village Tug Valley Williamson Tug Valley Eastern Region 606-874-0408 606-886-2382 606-788-9934 606-785-5095 606-487-2160 606-436-2157 606-487-2152 Pikeville Elkhorn City Marrowbone Mouthcard Phelps Pikeville Main Pikeville Main Street Pikeville Walmart Town Mountain Virgie Weddington Plaza * 211 W. Russell St. 10579 Regina Belcher Hwy. 32 N. Levisa Rd. 38720 State Hwy. 194 E. 346 N. Mayo Trl. 137 Main St. 254 Cassidy Blvd. 105 Northgate Dr. 1056 KY Hwy. 610 W. 4205 N. Mayo Trl. 101 E. 2nd Ave. 28160 US Hwy. 119 304-235-5454 606-237-6051 Whitesburg Whitesburg Main West Whitesburg Jenkins Isom Neon 155 Main St. 24 Pkwy. Plaza Loop 9505 Hwy. 805 56 Isom Plaza 1001 Hwy. 317 Northeastern Region 606-754-5589 606-754-4462 606-835-4907 606-456-8701 606-432-1414 606-437-3326 606-437-0048 606-437-3323 606-639-4451 606-432-4529 606-633-0161 606-633-4532 606-832-2477 606-633-5995 606-855-4435 Advantage Valley Alum Creek Hamlin Fort Gay Pullman Square 315 Midway Rd. 8049 Lynn Ave. 735 Court St. 952 3rd Ave. 304-756-3317 304-824-7223 304-648-7200 304-697-0272 Flemingsburg Ewing Flemingsburg Main South Ridge 1527 Ewing Rd. 36 Brookhaven Dr. 108 Clark St. 606-267-2061 606-845-3551 606-849-2304 * Ashland Ashland Main South Ashland Summit Westwood Russell Summersville Summersville 1544 Winchester Ave. 2101 29th St. 7100 US Rt. 60 721 Wheatley Rd. 970 Diederich Blvd. 606-329-6000 606-329-6600 606-928-9555 606-329-6610 606-329-6680 507 Main St. 304-872-2711 South Central Region Campbellsville Campbellsville Main Campbellsville Bypass Columbia Greensburg Lebanon Somerset North Somerset South Jamestown Williamsburg Williamsburg Main Convenience Center Corbin London South London North 1218 E. Broadway St. 402 Campbellsville Bypass 1005 Jamestown St. 205 S. Main St. 521 W. Main St. 239 N. Hwy. 27 3809 S. Hwy. 27 752 N. Main St. 201 N. 3rd St. 895 S. Hwy. 25 W. 678 US Hwy. 25 W. 1706 Hwy. 192 W. 38 Shiloh Dr. 270-789-5900 270-789-5900 270-384-4771 270-932-7464 270-692-0064 606-679-8826 606-679-8446 270-343-2556 606-549-5000 606-539-2251 606-526-8777 606-877-2644 606-864-2439 Middlesboro Middlesboro Main Middlesboro East Pineville Mt. Vernon Mt. Vernon Main Mt. Vernon Downtown 1918 Cumberland Ave. 1206 E. Cumberland Ave. 11792 US Hwy. 25 E. 606-248-9600 606-248-9642 606-337-6122 2134 Lake Cumberland Rd. 120 Main St. 606-256-5141 606-256-5142 * LaFollette LaFollette Main Jacksboro Clinton 106 S. Tennessee Ave. 2603 Jacksboro Pike 2106 Charles G. Seivers Blvd. 423-562-3364 423-566-7800 865-457-8684 20 *Community Trust and Investment Company has offices in these locations. salutes our 2020 for their 2019 Sales & Service Individual Success Team Success Jason Adams David Akers Steve Belcher Bridget Hall Todd Hargis Natalie Heighton Jennifer Blackburn Sean Hurley Regina Blankenship Andrew Jarvis Mike Bonfield Jessica Kendrick Gertrude Bostick Joe Kenney Janice Brafford-King Savi Kumar Allen Burner Rhonda S. Longmire Tiffany Reeder Ty Reynolds Brenda Rhodes Melissa Rhodes Amanda Ritchie Suzanne Sifers Roger Smith Helena Syck Caleb Tackett John R. Caldwell David Maynard Charles J. Tackett Reed Caudill Elizabeth Maynard-Johnson Chris Tackett Ryan N. Charles Ursula McCown Gerrie Clark Tami Coleman Anneta Collins Steven Conn Will Davis Sherry Dotson Bobby Terrell Medley Charlene Miller Gaylon D. Neat Marsha Newsom Penny Nichols Jessica Osborne Dorothy Franklin Joyce Pelly Judy Freeman Kristy Gross Barry Pennington Coltan Phillips David Tackett Debbie Thacker Jody Thompson Jennifer Ward Bob Watson Tammy Wheeler Ashley White Trina Yack Ashland Main Office Ashland Market Central Region Danville Market Eastern Region Floyd/Knott Market Pikeville Main Office Pikeville Market Residential Lending Department Versailles Main Office Versailles Market Winchester Main Office Winchester Market Cover Printed on Recycled Paper 346 North Mayo Trail, Pikeville, KY 41501 

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