Community Trust creates $5M reserve to reimburse clients for deposit add-ons
Community Trust Bancorp in Pikeville, Ky., has set aside nearly $5 million to reimburse customers for two deposit add-on products.
The $4.2 billion-asset company disclosed in a regulatory filing Thursday that it would be required by regulators to make the reimbursements.
Management had previously set aside $1.2 million. The reserve was increased after executives discussed the issue with regulators.
The company said it expects to record an after-tax charge of $3.1 million, or 18 cents a share, in the second quarter.
Community Trust first disclosed the products in question in its 2016 annual report, saying at that time that it would likely be cited for two violations of alleged unfair and deceptive practices.
Management established an accrual in 2014 for possible customer reimbursements after evaluating possible violations and their potential financial impact.