Community Trust Bancorp, Inc. (Kentucky) – Value Analysis (NASDAQ:CTBI) : August 7, 2017

Capitalcube gives Community Trust Bancorp, Inc. (Kentucky) a score of 50.

Our analysis is based on comparing Community Trust Bancorp, Inc. (Kentucky) with the following peers – Renasant Corporation, BancorpSouth, Inc., Farmers Capital Bank Corporation, Stock Yards Bancorp, Inc., Porter Bancorp, Inc., Citizens First Corporation and Citizens Holding Company (RNST-US, BXS-US, FFKT-US, SYBT-US, PBIB-US, CZFC-US and CIZN-US).

Fundamental Overview

Community Trust Bancorp, Inc. (Kentucky) has a fundamental score of 50 and has a relative valuation of NEUTRAL.

Fundamental Score

Company Overview

  • It’s current Price/Book of 1.49 is about median in its peer group.
  • The market expects CTBI-US to grow at about the same rate as the peers and to maintain the median returns it currently generates.
  • CTBI-US has relatively high profit margins while operating with median capital turns.
  • Compared with its chosen peers, the company’s annual revenues and earnings change at a slower rate, implying a lack of strategic focus and/or lack of execution success.
  • Over the last five years, CTBI-US‘s return on equity has declined from above median to around median among its peers, indicating declining relative operating performance.
  • While CTBI-US‘s revenues growth has been below the peer median in the last few years, the market still gives the stock a P/E ratio that is around peer median and seems to see the company as a long-term strategic bet.
  • The company is likely overinvesting in a business with only median returns.

Drivers of Margin

  • Margins do not suggest any relative benefit from a pricing or an operating cost advantage.
  • The company’s net interest income (net interest income/total revenues) of 72.98% is around peer median suggesting that CTBI-US‘s lending operations does not benefit from any differentiating pricing advantage. In addition, CTBI-US‘s pre-tax margin of 36.19% is also around the peer median suggesting no operating cost advantage relative to peers.
  • The company’s proportion of fee based income (i.e. non interest income/total revenues) of 27.02% is around peer median. In addition, CTBI-US‘s proportion of overhead costs (i.e. non interest expense/total revenues) of 59.33x is also around peer median — suggesting no cost advantage on fee-based overhead operations.
Drivers of Margins

Quadrant label definitions. Hover to know more

Differentiated; Low Cost, Differentiated; High Cost, Commodity; High Cost, Commodity; Low Cost

Company Profile

Community Trust Bancorp, Inc. (Kentucky) is a bank holding company, which engages in the provision of community banking services through its subsidiary Community Trust Bank, Inc. It offers residential and commercial real estate loans; checking accounts; regular and term savings accounts and savings certificates; full service securities brokerage services; consumer loans; debit cards; annuity and life insurance products; Individual Retirement Accounts and Keogh plans; commercial loans; trust and wealth management services; commercial demand deposit accounts; and repurchase agreements. The company was founded on August 12, 1980 and is headquartered in Pikeville, KY.