Community Trust Bancorp, Inc. (Kentucky) – Value Analysis (NASDAQ:CTBI) : November 13, 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 Bank, 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 OVERVALUED.

Fundamental Score

Company Overview

  • It’s current Price/Book of 1.56 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 73.63% 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 37.15% 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 26.37% is around peer median. In addition, CTBI-US‘s proportion of overhead costs (i.e. non interest expense/total revenues) of 59.22x 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 commercial and personal banking and trust and wealth management activities, which include accepting time and demand deposits; making secured and unsecured loans to corporations, individuals and others; providing cash management services to corporate and individual customers; issuing letters of credit; renting safe deposit boxes; and providing funds transfer services. The company was founded on August 12, 1980 and is headquartered in Pikeville, KY.