Community Trust Bancorp Inc.
Annual Report 2020

Plain-text annual report

2020 ANNUAL REPORT 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 Overcoming the Challenges of 2020 The operational environment for financial institutions was extremely challenging in 2020 due to the COVID-19 global pandemic, a weakened economy, and the circumstances requiring assistance which your Company provided to our customers and businesses facing financial difficulties. Our financial results for 2020 were impacted by many factors, including a low interest rate environment, a 30-day waiver of overdraft and return fees assessed to our customers, and high liquidity without good investment options. Our earnings performance continues to be better than most of our peer financial institutions. We recognize significant challenges will continue in the current economic climate. During our long history, 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. This was more important than ever before in facing the challenges of 2020. We embarked on unique programs to help our customers, while also continuing to provide donations and volunteer time to our communities, working to build more prosperous, healthy, and educated individuals and communities in the areas our offices are located. We believe that our country is strong and resilient and is committed to improving economic conditions to support a good quality of life for its residents and creating a business environment that will foster investments for job creation. 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. 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 117 years and has driven our strong history of earnings. 2020 2019 2018 2017 2016 Net Income (in thousands) $59,504 $64,540 $59,228 $51,493 $47,346 $0 $10,000 $20,000 $30,000 $40,000 $50,000 $60,000 $70,000 1 To Our Shareholders Dear Shareholders O E Operating in 2020 was different than your Company and other businesses anticipated when we created our business plans for the year. We had not anticipated the 2020 COVID-19 global pandemic and its impact on the United States and the world. Your Company continued operating as an essential business for the economy to keep moving as much as possible. During this time, we determined we needed to implement and expand our existing Pandemic Plan. We are proud of the way our employees met the challenges of operating during a pandemic and of the financial results we were able to accomplish despite the new operating environment. We were flexible and creative in maintaining an operating environment that would keep our employees and customers safe while continuing to provide outstanding products and services. Your Company turned challenges into Je a n R . H ale h air m a n, P re sid e nt a n d C C opportunities! For over 117 years, we have focused on all four of our constituents…our shareholders, our customers, our employees and our communities. We are pleased to share in your 2020 Annual Report some of the things we do to support our constituents in challenging times as well as good times. Your Company earned $59.5 million during 2020 which was 7.8% less than the $64.5 million earned during 2019. Our earnings per share at $3.35 was 8.0% less than the $3.64 earned in 2019. These earnings represented a return on average assets of 1.23% and return on average equity of 9.36%. Your Company did not meet our performance expectations for 2020; however, we are pleased with our financial performance with the challenges placed on operating during a pandemic and pleased with how we were able to help our customers and employees during this critical time. The year 2020 was a period of continuing low interest rates causing pressure on our net interest margin. Additionally, the net interest margin was impacted due to excess liquidity with limited investment opportunities as loan demand remained weak, except for the government supported Paycheck Protection Program (PPP). This loan program was designed to help businesses retain their employees and survive during the closures and overall economic conditions resulting from the pandemic. Your Company was pleased to assist these businesses by closing 2,962 PPP loans totaling $277 million through December 31, 2020. In July 2020, the Board of Directors approved the 40th consecutive increase in cash dividends to shareholders, increasing the quarterly cash dividend to $0.385 per share. At December 31, 2020, our annualized cash dividend yield to shareholders was 4.16%, and our dividend payout ratio was 45.7%. The earnings of your Company not paid to shareholders as cash dividends are reflected in the 6.5% increase in shareholders’ equity to $654.9 million from $614.9 million at December 31, 2019. Retained earnings are utilized for the continued growth of your Company to increase its earnings capacity long term. The strong performance of your Company was not recognized in the market price of CTBI stock. The price of CTBI stock during 2020 was a reflection of the sentiment of investors regarding the economy during a time of pandemic resulting in volatility. For example, the price of CTBI stock at the close of trading on the NASDAQ stock market on January 2, 2020 was $46.59; the closing price on September 23, 2020 was $28.05; and the closing price on December 31, 2020 was $37.05. The price of your stock continues to show recovery with a closing price of $40.86 on February 26, 2021. We believe the recovery in CTBI’s market price will continue as the U. S. economy continues to recover with the opening of businesses from pandemic closures and restrictions. Economic Conditions Economic conditions nationally and in the markets we serve in Kentucky, West Virginia, and Tennessee were all negatively impacted by the pandemic. Throughout the second half of 2020, with controlled reopening, we have seen improvements in economic conditions in all of the regions we serve, with the strongest improvement being in our central region in Kentucky followed by our south central region in Kentucky and Tennessee. The improvement in our eastern region of Kentucky and our northeastern region in Kentucky and West Virginia has been weaker, as they continue to be impacted by the declines in the energy industry. Although the U. S. 2 economy has improved, the Federal Reserve believes we still have a long time needed for recovery and has indicated they will continue to support economic recovery with low interest rates and bond purchases while the U. S. Government continues to provide support for the economy, individuals, and businesses through various federal stimulus programs. Operational Highlights During 2020, your management continued to focus on the organic growth of your Company. The total assets of your Company surpassed $5.1 billion this year, increasing $773.1 million, or 17.7%, from 2019. Our loan portfolio grew $305.5 million, a 9.4% increase from year-end 2019, while our deposits including repurchase agreements, grew $739.5 million, or 20.4%, during the same time period. The growth in loans and deposits was driven by the federal stimulus programs of the CARES Act which provided direct funds to support citizens and loans through the PPP program focused on keeping individuals employed and supporting businesses while their operations were curtailed by the pandemic. With this support, along with loan deferrals under the guidelines of the CARES Act, both individuals and businesses curtailed spending and focused on saving. The current environment remains competitive for quality loans as the demand remains constrained by COVID-19 restrictions. There is minimal competition for deposits as the industry continues to have a high level of liquidity. As the Federal Reserve continued to hold rates low during 2020, we experienced a decline in our net interest margin to 3.33% from the 3.60% of year-end 2019. During 2020, your management team continued its focus on improving the asset quality of your Company’s loan portfolio and reducing its level of foreclosed properties. Our credit matrices greatly improved by year-end 2020; however, due to the number of loan deferrals granted under the guidance of the CARES Act, we remain cautious and continue to closely monitor our loan portfolio. Our net charge-offs for 2020 of $6.2 million were slightly above the $5.6 million of 2019. The level of our foreclosed properties saw a meaningful decline of $11.8 million during 2020 to $7.7 million from the $19.5 million at year-end 2019. Strong Financial Performance We believe the consistently strong financial performance of your Company and our community banking business model supporting our four constituents continue 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 five-year cumulative total return of CTBI stock has underperformed the NASDAQ Stock Market and the NASDAQ Bank Stock Index. Stock price movements are generally reflective of investor views of the current economy or their expectations for the economy and that was certainly the case during the year of COVID-19 as the markets saw significant volatility. 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 nearly 1,000 employees. We believe challenges provide opportunities, and with our strong foundation and 117 years of experience, we have a long history of seizing opportunities for financial success. We are focused on the success of your Company. I hope that you will enjoy reading in this annual report about the tremendous support Your Company gave during 2020 to our constituents. 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 Financial Highlights Net income Basic earnings per share Diluted earnings per share Cash dividends per share Average shares outstanding (in thousands except ratios, per share amounts, and employees) For the Year 2020 2019 Percentage Change $ 59,504 3.35 3.35 1.53 17,748 $ 64,540 3.64 3.64 1.48 17,724 ( ( ( % ) 7.8 ) 8.0 ) 8.0 3.4 0.1 % At Year End 2020 2019 Percentage Change Total assets Earning assets Deposits, incl. repurchase agreements Loans Allowance for credit losses* Shareholders’ equity Book value per share Market price per common share Common shares outstanding Full time equivalent employees $5,139,141 4,878,211 4,371,944 3,554,211 48,022 654,865 36.77 37.05 17,810 998 $4,366,003 4,075,600 3,632,489 3,248,664 35,096 614,886 34.56 46.64 17,793 1,000 % 17.7 19.7 20.4 9.4 36.8 6.5 6.4 ) ( 20.6 % 0.1 ) 0.2 ( Significant Ratios 2020 2019 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 CBLR** Tier 1 leverage Common equity Tier 1 capital Tier 1 capital Total capital Allowance to net loans Allowance to nonperforming loans % 1.23 9.36 3.33 0.18 58.30 % 12.74 12.70 -- -- – -- 1.35 180.69 % 1.49 10.84 3.60 0.18 60.70 % ) ( 17.4 ) ( 13.7 ) ( 7.5 0.0 ) 4.0 ( % 14.08 -- 14.01 17.18 18.94 20.05 1.08 104.39 % ( ) 9.5 -- -- – – -- 25.0 73.1 * Effective January 1, 2020, the allowance for loan and lease losses became the allowance for credit losses with the implementation of ASU 2016-13, commonly referred to as CECL. 4 ** During 2020, CTBI elected to opt-in to the CBLR framework, which simplifies the regulatory capital requirements for eligible bank holding companies. See Note 20 in the Financial Information section of this Annual Report for further information. Earnings Per Share 2020 2019 2018 2017 2016 $3.35 $3.35 $3.64 $2.92 $2.70 $0.00 $0.50 $1.00 $1.50 $2.00 $2.50 $3.00 $3.50 $4.00 Dividends Per Share 2020 2019 2018 2017 2016 $1.53 $1.48 $1.38 $1.30 $1.26 $0.00 $0.20 $0.40 $0.60 $0.80 $1.00 $1.20 $1.40 $1.60 $1.80 Noninterest Income (in thousands) 2020 2019 2018 2017 2016 2020 2019 2018 2017 2016 $54,560 $50,184 $51,952 $48,508 $48,441 $0 $10,000 $20,000 $30,000 $40,000 $50,000 $60,000 Efficiency Ratio 58.30% 60.70% 60.17% 58.66% 58.54% 0.00% 10.00% 20.00% 30.00% 40.00% 50.00% 60.00% 70.00% 5 Financial Highlights Consolidated Statements of Income Year Ended December 31 (in thousands except per share data) 2020 2019 Percentage Change Interest income Interest expense Net interest income Provision for credit losses* Noninterest income Noninterest expense Income before income taxes Income tax expense Net Income Cash dividends per share Book value per share $ $ $ 176,441 25,450 150,991 16,047 54,560 119,239 70,265 10,761 59,504 1.53 36.77 $ $ $ 185,398 40,513 144,885 4,819 50,184 118,258 71,992 7,452 64,540 1.48 34.56 Average shares outstanding 17,748 17,724 % ) ( 4.8 ) ( 37.2 4.2 233.0 8.7 0.8 ) ( 2.4 44.4 ) ( 7.8 % 3.4 6.4 0.1 % (in thousands) Assets Consolidated Balance Sheets At December 31 2020 2019 Percentage Change Cash and deposits in other banks Securities Loans, net of allowance Other assets Total Assets $ 338,480 999,732 3,506,189 294,740 $ 264,928 602,314 3,213,568 285,193 $5,139,141 $4,366,003 Liabilities and Shareholders’ Equity Deposits Repurchase agreements Federal funds purchased Advances from Federal Home Loan Bank Long-term debt Other liabilities $ 4,016,082 355,862 500 395 57,841 53,596 $ 3,405,572 226,917 7,906 415 57,841 52,466 Total Liabilities 4,484,276 3,751,117 Shareholders’ Equity 654,865 614,886 Total Liabilities and Shareholders’ Equity $5,139,141 $4,366,003 % 27.8 66.0 9.1 3.3 17.7 % 17.9 56.8 ) ( 93.7 ) ( 4.8 0.0 2.2 19.5 6.5 17.7 6 *Effective January 1, 2020, the provision for loan losses became the provision for credit losses with the implementation of ASU 2016-13, commonly referred to as CECL. Total Assets (in thousands) $5,139,141 $4,366,003 $4,201,616 $4,136,231 $3,932,169 $0 $1,000,000 $2,000,000 $3,000,000 $4,000,000 $5,000,000 $6,000,000 Shareholders’ Equity (in thousands) $654,885 $614,886 $564,150 $530,699 $500,615 $0 $100,000 $200,000 $300,000 $400,000 $500,000 $600,000 $700,000 Total Loans (in thousands) $3,554,211 $3,248,664 $3,208,638 $3,122,940 $2,938,371 $0 $1,000,000 $2,000,000 $3,000,000 $4,000,000 Nonperforming Assets to Loans and Foreclosed Properties 0.96% 1.62% 1.53% 1.92% 2.13% 2020 2019 2018 2017 2016 2020 2019 2018 2017 2016 2020 2019 2018 2017 2016 2020 2019 2018 2017 2016 0.00% 0.50% 1.00% 1.50% 2.00% 2.50% 7 Shareholders Our history of sharing our success with our shareholders continued during 2020, as we increased the cash dividend to our shareholders for the 40th consecutive year. Our directors, officers, and staff focus on providing a stable and competitive return for our investors year after year. Our Company is focused on maintaining the highest level of operating performance necessary to create shareholder value. We continued to grow our shareholders' equity to $654.9 million at December 31, 2020, a 6.5% increase from the $614.9 million at December 31, 2019. In 2020, our stock experienced a 20.6% decrease in market price. Although showing signs of recovery in 2021, the market price was negatively impacted by the sentiment of investors during the COVID-19 pandemic in 2020. Our annualized dividend yield to shareholders as of December 31, 2020 was 4.16%, 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 4.7% at December 31, 2020, as Community Trust achieved earnings of $59.5 million. In 2019, earnings were a record $64.5 million. During 2020, we reached the milestone of having assets of $5.1 billion. CTBI must maintain certain minimum capital ratios for capital adequacy purposes. During 2020, CTBI elected to opt-in to the new community bank leverage ratio (CBLR) framework, which simplifies the regulatory capital requirements for eligible bank holding companies. See Note 20 in the Financial Information section of this Annual Report for further information. For 2020, CTBI was required to maintain a minimum CBLR ratio of 8.00%. At December 31, 2020, our CBLR ratio was 12.70%. Our tangible common equity/tangible assets ratio on December 31, 2020 remained strong at 11.62%. 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, 2015 would have provided an annualized total return of 4.4% as of December 31, 2020. Our employees are committed to the mission of your Company by also making it their company, as is evidenced by their ownership of the Company’s stock. Through their 401(k) and ESOP plans, our employees collectively own 1.3 million shares, or 7.1%, of Community Trust Bancorp, Inc. stock. This ownership, along with their individually owned shares, makes our employees our largest shareholder. 2020 2019 2018 2017 2016 Book Value Per Share $36.77 $34.56 $31.81 $30.00 $28.40 $0.00 $5.00 $10.00 $15.00 $20.00 $25.00 $30.00 $35.00 $40.00 8 Customers Community Trust cares deeply about the health and well-being of our customers, our communities, and our employees and has taken all necessary measures to protect them during the global pandemic. In 2020, Community Trust served more than 290,000 customers. We renovated our branches during the year with safety utmost in mind. Plexiglas barriers were installed at the teller lines, signage assisted customers to maintain social distance, and masks and hand sanitizers were provided for customers. All of our ATMs and night deposit boxes remained available 24 hours a day. We continue working with our loan and deposit customers through the COVID-19 pandemic. We met the challenges of being essential workers and continued to serve our customers well. We helped support our customers' businesses through the Small Business Administration Paycheck Protection Program (PPP) and the highest level of residential loan production in your Company's history. As of December 31, 2020, we closed 2,962 PPP loans totaling $277.0 million, stemming from the CARES Act passed by Congress as a stimulus response to the potential economic impacts of COVID-19. Consistent with the guidelines of the CARES Act, we deferred payments on 3,844 commercial, residential, and consumer loans totaling $992 million as of December 31, 2020. Our customers continue to show improvement in their ability to resume payments with 3,071 (representing $540 million) having resumed payment status as of December 31, 2020. Among community banks, Community Trust Bank is one of the top small business lenders in Kentucky and in the counties that we serve. During the last 12 federal fiscal years, Community Trust has funded more than 3,900 SBA loans, providing access to over $487 million for small businesses in the region. Other loans that Community Trust offers include USDA guaranteed loans and 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 through their “Welcome Home” program. Outstanding customer service is our goal. 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 Consumer and Business Mobile Deposit Capture. Our deposit related products and services include certificates of deposits, savings accounts, online banking and online bill payment (at www.ctbi.com), mobile banking, business and consumer remote deposit capture, and commercial cash management services. We offer our customers convenient access to their accounts through our network of 85 ATMs. The total number of ATMs to which our customers have free access is more than 100. 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. 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. We are pleased to serve our customers both 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. 9 Employees Management and the Board of Directors continue to believe that our most valuable assets are our employees. For health and safety, we implemented new business travel restrictions and new approval requirements for business travel. We offered paid time off for employees who were directly impacted by COVID-19. We facilitated the process for hundreds of employees to work from home on computers we provided, meeting their needs as well as the needs of your Company. We provided masks and sanitizers for our employees, and our housekeeping staff went the extra mile to ensure that our offices were clean and safe. We also continue to share health and wellness information with employees through our internal Intranet. In recognition of the extraordinary efforts as essential workers in meeting the challenges created by the COVID- 19 pandemic, in January 2021, the Board of Directors approved a payment of 2.00% of salary to qualifying full- time employees who were not participants in other incentive plans. 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, and are committed to providing our employees with opportunities for personal and professional growth, whether it is by providing reimbursement of educational expenses, encouraging attendance at seminars and in-house training programs, or sponsoring memberships in local civic organizations. Our employees recognize the long-term benefit of working with our organization as evidenced by the 20% of our employees who have 20 years or more of service. Our employees participated in numerous coaching, training, and education programs throughout the year. Additionally, Community Trust makes online training available to employees. As a result, over 1,000 employees completed 168 different compliance and technical skill training courses through our Regulatory University system during 2020. Employees also had an opportunity during 2020 to utilize two new programs that also provided skill development online. Even with the limitations on training during the pandemic, the Training Department was able to convert all of the existing classroom courses into remote classes using e- learning and webinar formats so that our employees would still be able to access skill training. These remote training opportunities are allowing employees to be trained without having to travel, thus saving time and money. Some employees worked on their skill development through post-secondary education courses, which were funded through our Educational Assistance Program. Community Trust offers its employees competitive compensation, as well as a highly competitive benefits package of health, life, retirement benefits, education reimbursement programs, and incentive plans. Community Trust is proud to have paid in excess of $17.7 million in support of these programs in 2020. 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. Participants can earn cash bonuses and win awards for top achievement. In February 2020, we announced the winners of our 21st annual “Pinnacle of Success” awards and recognized 61 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 16. 10 Communities Our continuing support of our communities, both financially and through the volunteer service of our employees, has helped build great places to live for both our customers and our fellow employees. During 2020, we donated nearly $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. We have helped our friends and neighbors fulfill their financial dreams for more than 117 years. In 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 employees contributed over 2,000 community service hours to these organizations during 2020, with over 1,000 of those having a community development purpose per Community Reinvestment Act (CRA) guidelines. We also made over $390,000 in donations with a community development purpose per CRA guidelines to local organizations, in addition to other investments totaling nearly $45 million that funded various community development projects. We also funded nearly $75 million in loans for community development projects in our CRA assessment area, as well as another $17 million to areas outside but near our assessment area. 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. Our employees volunteer thousands of hours each year to these and numerous other outstanding local community organizations. Community Trust actively participates in a vast and wide variety of organizations, including providing leadership by participating in their boards of directors and attending meetings, conferences, and workshops. In 2020, Community Trust continued to actively support SOAR (Shaping Our Appalachian Region). Community Trust's support of SOAR included providing leadership by having a representative serve on its board of directors and by donating office space to their organization. We have also supported 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 to work to improve the lives of our fellow citizens and quality of life in the cities, towns, and neighborhoods which we share. CTBI Community Financial Support 2020 2019 2018 2017 2016 $964,000 $1,068,000 $1,041,000 $1,150,000 $904,000 $0 $200,000 $400,000 $600,000 $800,000 $1,000,000 $1,200,000 $1,400,000 11 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 12 * 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 13 Advisory Board Members Eastern Region Northeastern Region South Central Region Central Region Larry W. Jones Regional President Richard Newsom Regional President Andrew 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 Charlene Miller 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 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 Ricky Sparkman Regional President Campbellsville Ricky Sparkman Regional President Barry Bertram Eddie Hazelwood Jerry Russell John Waldrop LaFollette Rhonda Longmire Market President Robert Ball George Ellison James C. Farris, M.D. Marvin Minton Peggy Payne Tom Robards 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-Mink Connie Hunt Gary W. Mink Tommy H. 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 * These markets are served by the Community Trust Bank, Inc. Board of Directors. + Retired 9/30/2020 14 Shareholder Information Corporate Address Dividend Reinvestment 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 Shareholders will be a live virtual meeting held via the Internet at: http://www.virtualshareholdermeeting.com/ CTBI2021 on Tuesday, April 27, 2021 at 10:00 a.m. EDT. 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 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 15 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 270-469-1472 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 16 *Community Trust and Investment Company has offices in these locations. Individual Success Jason Adams David Akers Andrew Jarvis Brett Keene Anthony D. Anderson Candice Keene Anthony Asher Jessica Kendrick Jason Ayers Cody Belcher Savi Kumar Tommie Layne Jennifer Belcher Jeff Loader Steve Belcher Rhonda S. Longmire Howard Blackburn Thomas McCoy Regina Blankenship Shelia Meade Cindy Blanton Robert Burgess Bobby Terrell Medley Lois Miller John R. Caldwell Gaylon D. Neat Reed Caudill Luke Chill Brian Clark Gerrie Clark Jody E. Oney Joyce Pelly Barry Pennington Ty Reynolds Teresa Coleman Melissa Rhodes Steven Conn Chris Daniels Sherry Dotson Jim Draughn Mark Salyer Curtis Sizemore Roger Smith Jo Ann Speaks Dorothy Franklin Helena Syck Kay Frasure Judy Freeman Aaron Goble Mary Goodin Todd Hargis Shirie Hawkins David Tackett Jody Thompson Jennifer Ward Ashley White Michael Willis David Wills Natalie M. Heighton Trina Yack Sean Hurley Team Success Ashland Main Office Ashland Market Ashland Summit Office Central Region Eastern Region Pikeville Main Office Pikeville Market Richmond Market Technology Department Tug Valley Office Versailles Market Whitesburg Market salutes our 2021 Pinnacle Award Winners for their 2020 Sales & Service 

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