UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the quarterly period ended March 31, 2025
	Or
☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the transition period from _____________ to _____________

Commission file number 001-31220

COMMUNITY TRUST BANCORP, INC.

(Exact name of registrant as specified in its charter)

Kentucky	61-0979818
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification No.)

346 North Mayo Trail P.O. Box 2947 Pikeville, Kentucky	41502
(Address of principal executive offices)	(Zip code)

(606) 432-1414

(Registrant’s telephone number)

Securities registered pursuant to Section 12(b) of the Act:

Common Stock

(Title of class)

CTBI	The NASDAQ Global Select Market
(Trading symbol)	(Name of exchange on which registered)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.

Yes ✔

Indicate by check mark whether the registrant has submitted electronically every interactive data file required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes ✔

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer ✔	Accelerated Filer ☐	Non-accelerated Filer ☐

Smaller Reporting Company ☐	Emerging Growth Company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised ﬁnancial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐

No ✔

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practical date.

Common stock – 18,110,933 shares outstanding at April 30, 2025

CAUTIONARY STATEMENT

REGARDING FORWARD LOOKING STATEMENTS

Certain of the statements contained herein that are not historical facts are forward-looking statements within the meaning of the Private Securities Litigation Reform Act. Community Trust Bancorp, Inc.’s (“CTBI”) actual results may differ materially from those included in the forward-looking statements. Forward-looking statements are typically identified by words or phrases such as “believe,” “expect,” “anticipate,” “intend,” “estimate,” “may increase,” “may fluctuate,” and similar expressions or future or conditional verbs such as “will,” “should,” “would,” and “could.” These forward-looking statements involve risks and uncertainties including, but not limited to, economic conditions, portfolio growth, the credit performance of the portfolios, including bankruptcies, and seasonal factors; changes in general economic conditions including the performance of financial markets, prevailing inflation and interest rates, realized gains from sales of investments, gains from asset sales, and losses on commercial lending activities; the effects of epidemics, pandemics, or other infectious disease outbreaks; results of various investment activities; the effects of competitors’ pricing policies, changes in laws and regulations, competition, and demographic changes on target market populations’ savings and financial planning needs; industry changes in information technology systems on which we are highly dependent; failure of acquisitions to produce revenue enhancements or cost savings at levels or within the time frames originally anticipated or unforeseen integration difficulties; the resolution of legal proceedings and related matters; and such other factors as discussed throughout this quarterly report on Form 10-Q, CTBI’s annual report on Form 10-K for the year ended December 31, 2024, and other documents subsequently filed by CTBI with the Securities and Exchange Commission. In addition, the banking industry in general is subject to various monetary, operational, and fiscal policies and regulations, which include, but are not limited to, those determined by the Federal Reserve Board, the Federal Deposit Insurance Corporation, the Consumer Financial Protection Bureau, and state regulators, whose policies, regulations, and enforcement actions could affect CTBI’s results. These statements are representative only on the date hereof, and CTBI undertakes no obligation to update any forward-looking statements made.

PART I - FINANCIAL INFORMATION

Item 1. Condensed Consolidated Financial Statements

The accompanying information has not been audited by our independent registered public accountants; however, in the opinion of management such information reflects all adjustments necessary for a fair presentation of the results for the interim period. All such adjustments are of a normal and recurring nature.

The accompanying condensed consolidated financial statements are presented in accordance with the requirements of Form 10-Q and consequently do not include all of the disclosures normally required by accounting principles generally accepted in the United States of America or those normally made in the Registrant’s annual report on Form 10-K. Accordingly, the reader of the Form 10-Q should refer to the Registrant’s Form 10-K for the year ended December 31, 2024 for further information in this regard.

Community Trust Bancorp, Inc.

Condensed Consolidated Balance Sheets

(in thousands except share data)	(unaudited) March 31 2025			December 31 2024
Assets:
Cash and due from banks	$	68,532		$	73,021
Interest bearing deposits		272,133			296,484
Cash and cash equivalents		340,665			369,505

Certificates of deposit in other banks		245			245
Debt securities available-for-sale at fair value (amortized cost of $1,123,078 and $1,186,649, respectively)		1,008,552			1,055,728
Equity securities at fair value		4,261			3,781
Loans held for sale		0			184

Loans		4,636,536			4,486,637
Allowance for credit losses		(56,961	)		(54,968	)
Net loans		4,579,575			4,431,669

Premises and equipment, net		50,753			49,630
Operating right-of-use assets		12,694			11,414
Finance right-of-use assets		2,942			2,971
Federal Home Loan Bank stock		4,886			5,062
Federal Reserve Bank stock		4,887			4,887
Goodwill		65,490			65,490
Bank owned life insurance		115,319			101,509
Mortgage servicing rights		7,093			7,357
Other real estate owned		4,795			3,647
Deferred tax asset		24,541			29,065
Accrued interest receivable		24,032			24,758
Other assets		25,788			26,343
Total assets	$	6,276,518		$	6,193,245

Liabilities and shareholders’ equity:
Deposits:
Noninterest bearing	$	1,235,544		$	1,242,676
Interest bearing		3,875,761			3,827,513
Total deposits		5,111,305			5,070,189

Repurchase agreements		246,556			240,166
Federal funds purchased		500			500
Advances from Federal Home Loan Bank		309			314
Long-term debt		63,958			64,016
Operating lease liability		13,021			11,751
Finance lease liability		3,440			3,439
Accrued interest payable		10,899			8,378
Other liabilities		42,358			36,908
Total liabilities		5,492,346			5,435,661

Shareholders’ equity:
Preferred stock, 300,000 shares authorized and unissued		0			0
Common stock, $5.00 par value, shares authorized 25,000,000; shares issued and outstanding 2025 – 18,101,765; 2024 – 18,057,923		90,510			90,290
Capital surplus		234,355			233,802
Retained earnings		545,372			531,861
Accumulated other comprehensive loss, net of tax		(86,065	)		(98,369	)
Total shareholders’ equity		784,172			757,584

Total liabilities and shareholders’ equity	$	6,276,518		$	6,193,245

See notes to condensed consolidated financial statements.

Community Trust Bancorp, Inc.

Condensed Consolidated Statements of Income and Comprehensive Income

(unaudited)

	Three Months Ended
	March 31
(in thousands except per share data)	2025		2024
Interest income:
Interest and fees on loans, including loans held for sale	$	72,736	$	64,716
Interest and dividends on securities
Taxable		5,775		6,730
Tax exempt		617		659
Interest and dividends on Federal Reserve Bank and Federal Home Loan Bank stock		188		209
Interest on Federal Reserve Bank deposits		2,648		2,591
Other, including interest on federal funds sold		90		97
Total interest income		82,054		75,002

Interest expense:
Interest on deposits		27,458		27,676
Interest on repurchase agreements and federal funds purchased		2,318		2,575
Interest on long-term debt		1,011		1,160
Total interest expense		30,787		31,411

Net interest income		51,267		43,591
Provision for credit losses		3,568		2,656
Net interest income after provision for credit losses		47,699		40,935

Noninterest income:
Deposit related fees		6,822		7,011
Gains on sales of loans, net		47		45
Trust and wealth management income		3,981		3,517
Loan related fees		965		1,352
Bank owned life insurance		1,035		1,292
Brokerage revenue		494		490
Securities gains		480		371
Other noninterest income		1,073		1,056
Total noninterest income		14,897		15,134

Noninterest expense:
Officer salaries and employee benefits		4,397		4,241
Other salaries and employee benefits		15,721		15,881
Occupancy, net		2,751		2,378
Equipment		689		650
Data processing		2,859		2,518
Taxes other than property and payroll		529		442
Legal fees		560		218
Professional fees		665		614
Advertising and marketing		673		577
FDIC insurance		689		642
Other real estate owned provision and expense		61		40
Repossession expense		193		226
Other noninterest expense		4,421		3,793
Total noninterest expense		34,208		32,220

Income before income taxes		28,388		23,849
Income taxes		6,416		5,170
Net income		21,972		18,679

Other comprehensive gain (loss):
Unrealized holding gains (losses) on debt securities available-for-sale arising during the period		16,395		(4,725	)
Tax expense (benefit)		4,091		(1,179	)
Other comprehensive gain (loss), net of tax		12,304		(3,546	)
Comprehensive income	$	34,276	$	15,133

Basic earnings per share	$	1.22	$	1.04
Diluted earnings per share	$	1.22	$	1.04

Weighted average shares outstanding-basic		17,995		17,926
Weighted average shares outstanding-diluted		18,022		17,943

See notes to condensed consolidated financial statements.

Consolidated Statements of Changes in Shareholders’ Equity

(unaudited)

(in thousands except per share and share amounts)	Common Shares			Common Stock			Capital Surplus			Retained Earnings			Accumulated Other Comprehensive Income (Loss), Net of Tax			Total
Balance, December 31, 2024		18,057,923		$	90,290		$	233,802		$	531,861		$	(98,369	)	$	757,584
Net income											21,972						21,972
Other comprehensive income (loss)														12,304			12,304
Cash dividends declared ($0.47 per share)											(8,461	)					(8,461	)
Issuance of common stock		30,802			154			122									276
Issuance of restricted stock		38,538			193			(193	)								0
Vesting of restricted stock		(25,498	)		(127	)		127									0
Stock-based compensation								497									497
Balance, March 31, 2025		18,101,765		$	90,510		$	234,355		$	545,372		$	(86,065	)	$	784,172

(in thousands except per share and share amounts)	Common Shares			Common Stock			Capital Surplus			Retained Earnings			Accumulated Other Comprehensive Income (Loss), Net of Tax			Total
Balance, December 31, 2023		17,999,840		$	89,999		$	231,130		$	484,400		$	(103,321	)	$	702,208
Net income											18,679						18,679
Other comprehensive income (loss)														(3,546	)		(3,546	)
Cash dividends declared ($0.46 per share)											(8,249	)					(8,249	)
Issuance of common stock		29,026			145			146									291
Issuance of restricted stock		15,000			75			(75	)								0
Vesting of restricted stock		(22,408	)		(112	)		112									0
Forfeiture of restricted stock		(2,109	)		(11	)		11									0
Stock-based compensation								302									302
Cumulative effect of FASB adjustment											(1,961	)					(1,961	)
Balance, March 31, 2024		18,019,349		$	90,096		$	231,626		$	492,869		$	(106,867	)	$	707,724

See notes to condensed consolidated financial statements.

Community Trust Bancorp, Inc.

Condensed Consolidated Statements of Cash Flows

(unaudited)

	Three Months Ended
	March 31
(in thousands)	2025			2024
Cash flows from operating activities:
Net income	$	21,972		$	18,679
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		957			926
Amortization of operating lease right-of-use assets		439			174
Deferred tax expense		433			246
Stock-based compensation		544			343
Provision for credit losses		3,568			2,656
Write-downs of other real estate owned and other repossessed assets		0			42
Gains on sale of mortgage loans held for sale		(47	)		(45	)
Fair value adjustments in equity securities		(480	)		(371	)
(Gains) losses on sale of assets, net		22			(40	)
Proceeds from sale of mortgage loans held for sale		1,829			1,739
Funding of mortgage loans held for sale		(1,618	)		(1,619	)
Amortization of securities premiums and discounts, net		584			595
Change in cash surrender value of bank owned life insurance		(701	)		(983	)
Payment of operating lease liabilities		(449	)		(189	)
Interest expense on finance lease liabilities		40			40
Mortgage servicing rights:
Fair value adjustments		284			(108	)
Changes in:
Accrued interest receivable		726			43
Other assets		555			(2,131	)
Accrued interest payable		2,521			1,976
Other liabilities		5,403			4,211
Net cash provided by operating activities		36,582			26,184

Cash flows from investing activities:
Securities available-for-sale (AFS):
Purchase of AFS securities		(52,786	)		(8,448	)
Proceeds from sales of AFS securities		0			1,084
Proceeds from prepayments, calls, and maturities of AFS securities		115,773			54,263
Change in loans, net		(152,720	)		(111,772	)
Purchase of premises and equipment		(2,077	)		(2,181	)
Proceeds from sale of stock by Federal Home Loan Bank		0			272
Redemption of Federal Home Loan Bank stock		176			0
Proceeds from sale of other real estate owned and repossessed assets		101			236
Additional investment in other real estate owned and repossessed assets		0			(13	)
Additional investment in bank owned life insurance		(13,548	)		0
Liquidation of cash surrender value of bank owned life insurance		440			870
Proceeds from settlement of bank owned life insurance		0			396
Net cash used in investing activities		(104,641	)		(65,293	)

Cash flows from financing activities:
Change in deposits, net		41,116			59,648
Change in repurchase agreements and federal funds purchased, net		6,390			9,426
Payments on advances from Federal Home Loan Bank		(5	)		(5	)
Payment of finance lease liabilities		(39	)		(38	)
Repayment of long-term debt/other borrowings		(58	)		(56	)
Issuance of common stock		276			291
Dividends paid		(8,461	)		(8,259	)
Net cash provided by financing activities		39,219			61,007
Net increase (decrease) in cash and cash equivalents		(28,840	)		21,898
Cash and cash equivalents at beginning of period		369,505			271,400
Cash and cash equivalents at end of period	$	340,665		$	293,298

Supplemental disclosures:
Income taxes paid	$	0	$	160
Interest paid		28,266		29,435
Non-cash activities:
Loans to facilitate the sale of other real estate owned and repossessed assets		0		157
Common stock dividends accrued, paid in subsequent quarter		277		281
Real estate acquired in settlement of loans		1,246		31
Right-of-use assets obtained in exchange for new operating lease liabilities		1,719		0

See notes to condensed consolidated financial statements.

Community Trust Bancorp, Inc.

Notes to Condensed Consolidated Financial Statements (unaudited)

Note 1 - Summary of Significant Accounting Policies

In the opinion of management, the unaudited condensed consolidated financial statements include all adjustments (which consist of normal recurring adjustments) necessary, to present a fair statement of the results for the interim periods presented. In accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information, these statements do not include certain information and footnote disclosures required by GAAP for complete annual financial statements. The results of operations, other comprehensive income (loss), the changes in shareholders’ equity, and the cash flows for the interim periods presented are not necessarily indicative of the results to be expected for the full year. The condensed consolidated balance sheet as of December 31, 2024 has been derived from the audited consolidated financial statements of CTBI for that period. For further information, refer to the consolidated financial statements and footnotes thereto for the year ended December 31, 2024, included in our annual report on Form 10-K.

Principles of Consolidation – The unaudited condensed consolidated financial statements include the accounts of CTBI and its separate and distinct, wholly owned subsidiaries Community Trust Bank, Inc. (“CTB”) and Community Trust and Investment Company. All significant intercompany transactions have been eliminated in consolidation.

New Accounting Standards –

➢ FASB Issues Standard that Enhances Income Tax Disclosures – In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires, among other things, greater disaggregation of information in the income tax rate reconciliation and for paid income taxes to be disaggregated by jurisdiction. This ASU became effective on January 1, 2025. This ASU affects annual financial statement disclosure only (which is not required until year end 2025) and, as a result, does not affect our results of operations or financial condition.

➢ FASB Issues Improvement to Income Statement Expense Disclosures – In November 2024, the FASB issued ASU No. 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses to improve the disclosures about a public business entity’s expenses and address investor requests for more detailed information about the types of expenses (including purchases of inventory, employee compensation, depreciation, amortization, and depletion) in commonly presented expense captions. ASU No. 2024-03 is effective for fiscal years beginning after December 15, 2026, and interim periods beginning after December 15, 2027. Early adoption is permitted. The amendments in this update should be applied either prospectively to financial statements issued for reporting periods after the effective date of this update, or retrospectively to any or all prior periods presented in the financial statements. ASU 2024-03 is not expected to have a material impact on CTBI’s financial statements.

Significant Accounting Policies –

The preparation of consolidated financial statements in conformity with GAAP requires the appropriate application of certain accounting policies, many of which require us to make estimates and assumptions about future events and their impact on amounts reported in our consolidated financial statements and related notes. Since future events and their impact cannot be determined with certainty, the actual results will inevitably differ from our estimates. Such differences could be material to our consolidated financial statements.

We believe the application of accounting policies and the estimates required therein are reasonable. These accounting policies and estimates are constantly reevaluated, and adjustments are made when facts and circumstances dictate a change. Historically, we have found our application of accounting policies to be appropriate, and actual results have not differed materially from those determined using necessary estimates.

We have identified the following significant accounting policies:

Investments – Management determines the classification of securities at purchase. We classify debt securities into held-to-maturity (“HTM”) or available-for-sale (“AFS”) categories. HTM securities are those which we have the positive intent and ability to hold to maturity and are reported at amortized cost. We do not currently have any securities that are classified as HTM.

AFS securities are reported at fair value, with unrealized gains and losses reported in shareholders’ equity as a separate component of accumulated other comprehensive income, net of tax. Gains or losses on disposition of debt securities are computed by specific identification for those securities, and is recognized in income as of the trade date. Interest and dividend income, adjusted by amortization of purchase premium or discount, is included in earnings. Callable debt securities held at a premium are amortized to the earliest call date, shortening the amortization period. Debt securities held at a discount continue to be amortized to maturity. The premiums and discounts for securities use the effective interest method. Accrued interest on investment securities is based on stated rates and is presented as a component of accrued interest receivable in the consolidated balance sheets.

For AFS debt securities in an unrealized loss position, we evaluate the securities to determine whether the decline in the fair value below the amortized cost basis (impairment) is due to credit-related factors or non-credit related factors. Any impairment that is not credit-related is recognized in accumulated other comprehensive income, net of tax. Credit-related impairment is recognized as an allowance for credit losses (“ACL”) for AFS debt securities on the consolidated balance sheet, limited to the amount by which the amortized cost basis exceeds the fair value, with a corresponding adjustment to earnings. Accrued interest receivable on AFS debt securities is excluded from the estimate of credit losses. Both the ACL for AFS debt securities and the adjustment to net income may be reversed if conditions change. However, if we intend to sell an impaired AFS debt security or more likely than not will be required to sell such a security before recovering its amortized cost basis, the entire impairment amount would be recognized in earnings with a corresponding adjustment to the security’s amortized cost basis. Because the security’s amortized cost basis is adjusted to fair value, there is no ACL for AFS debt securities in this situation.

In evaluating AFS debt securities in unrealized loss positions for impairment and the criteria regarding its intent or requirement to sell such securities, we consider the extent to which fair value is less than amortized cost, whether the securities are issued by the federal government or its agencies, whether downgrades by bond rating agencies have occurred, and the results of reviews of the issuers’ financial condition, among other factors. There were no credit related factors underlying unrealized losses on AFS debt securities at March 31, 2025 and December 31, 2024; therefore, no ACL for AFS securities was recorded.

Losses are charged against the ACL for AFS debt securities when management believes the uncollectability of an AFS debt security is confirmed or when either of the criteria regarding intent or requirement to sell is met.

Equity securities with a readily determinable fair value are measured at fair value, with changes in fair value recognized in net income. Equity securities without a readily determinable fair value are carried at cost, less any impairment, if any, plus or minus changes resulting from observable price changes for identical or similar investments. CTBI has made an irrevocable election to subsequently measure an equity security without a readily determinable fair value, and all identical or similar investments of the same issuer, including future purchases of identical or similar investments of the same issuer, at fair value. CTBI has made this election for our Visa Class B equity securities. The fair value of these securities was determined using Level 3 inputs as defined in Accounting Standards Codification (“ASC”) 820, Fair Value Measurement, and changes in fair value are recognized in income.

Loans – Loans with the ability and the intent to be held until maturity or for the foreseeable future are reported at the carrying value of unpaid principal reduced by unearned interest, an ACL, and unamortized deferred fees or costs and premiums. Income is recorded on the level yield basis. Interest accrual is discontinued when a loan is greater than 90 days past due or when management believes, after considering economic and business conditions, collateral value, and collection efforts, that the borrower’s financial condition is such that collection of interest is doubtful. Any loan greater than 90 days past due must be well secured and in the process of collection to continue accruing interest. Cash payments received on nonaccrual loans generally are applied against principal, and interest income is only recorded once principal recovery is reasonably assured. Loans are not reclassified as accruing until principal and interest payments remain current for a period of time, generally six months, and future payments appear reasonably certain. Loan origination and commitment fees and certain direct loan origination costs are deferred and the net amount amortized over the estimated life of the related loans or commitments to interest income using the effective interest method.

Allowance for Credit Losses – CTBI measures expected credit losses of financial assets on a collective (pool) basis using the discounted cash flow method when the financial assets share similar risk characteristics. Loans that do not share risk characteristics are evaluated on an individual basis. Regardless of an initial measurement method, once it is determined that foreclosure is probable, the ACL is measured based on the fair value of the collateral as of the measurement date. As a practical expedient, the fair value of the collateral may be used for a loan when determining the ACL for which the repayment is expected to be provided substantially through the operation or sale of the collateral when the borrower is experiencing financial difficulty. The fair value shall be adjusted for selling costs when foreclosure is probable. For collateral-dependent financial assets, the credit loss expected may be zero if the fair value less costs to sell exceed the amortized cost of the loan. Loans shall not be included in both collective assessments and individual assessments.

Using the ACL software, forecasts include gross domestic product, light weight vehicle sales index, and housing price index considerations. CTBI leverages economic projections from the Federal Open Market Committee to obtain various forecasts for unemployment rate, gross domestic product, light weight vehicle sales index, and the PNC forecast for the Case-Shiller National Home Price Index. CTBI has elected to forecast the first four quarters of the credit loss estimate and revert to a long-run average of each considered economic factor, as permitted in ASC 326-20-30-9, over four quarters.

All periods during the reasonable and supportable forecast period are utilizing a forecasted probability of default. Loss driver analysis was performed during which regression models were built relating default rates of the various segments to the economic factors noted above. Historical loss data for both CTBI and segment-specific selected peers was incorporated from Federal Financial Institutions Examination Council call report data. For loss given default, the Frye-Jacobs LGD estimation technique was utilized in the ACL software providing a risk curve that most approximates the asset class under consideration. Management elected to evaluate internal prepayment experience over a trailing timeframe to determine the appropriate prepayment and curtailment rates to be used in the credit loss estimate.

CTBI uses management judgement for qualitative loss factors such as delinquency trends, supervision and administration, quality control exceptions, collateral values, and industry concentrations. The ACL software allows management to approve a “worst case” scenario or a maximum loss rate for each segment. Qualitative dollars available for allocation then become the difference between the worst case and the ACL quantitative reserve estimate. Each factor is then given a risk weighting that is applied to determine a basis point allocation. The qualitative loss factors are as follows:

•

Changes in delinquency trends by loan segment

•

Changes in international, national, regional, and local conditions

•

The effect of other external factors (i.e. competition, legal and regulatory requirements) on the level of estimated credit losses

•

The existence and effect of any concentrations of credit and changes in the levels of such concentrations

•

A supervision and administration allocation based on CTBI’s loan review process

•

Exceptions in lending policies and procedures as measured by quarterly loan portfolio exceptions reports

•

Changes in the the value of underlying collateral for collateral dependent loans

•

Changes in the nature and volume of the portfolio and terms of loans

We maintain an ACL at a level that is appropriate to cover estimated credit losses on individually evaluated loans, as well as estimated credit losses inherent in the remainder of the loan and lease portfolio. Credit losses, when deemed uncollectible, are charged to the ACL and any subsequent recoveries are credited to the ACL.

We utilize an internal risk grading system for commercial credits. Those credits that meet the following criteria are subject to individual evaluation: the loan has an outstanding bank share balance of $1 million or greater and meets one of the following criteria: (i) has a criticized risk rating, (ii) is in nonaccrual status, (iii) the borrower is experiencing financial difficulty with significant payment delay, or (iv) is 90 days or more past due. The borrower’s cash flow, adequacy of collateral coverage, and other options available to CTBI, including legal remedies, are evaluated. Historical loss rates are analyzed and applied to other commercial loan segments not subject to individual evaluation. As these loans are individually evaluated, analysis could result in a specific reserve allocation within the ACL.

Homogenous loans, such as consumer installment, residential mortgages, and home equity lines are not individually risk graded. The associated ACL for these loans is measured in pools with similar risk characteristics under ASC 326.

When a secured commercial loan is displaying signs of weakness or deficiency, whether past due or not, a current assessment of the value of the underlying collateral is made. If the balance of the loan exceeds the fair value of the collateral, the loan is placed on nonaccrual and the loan is charged down to the value of the collateral less estimated cost to sell. When the foreclosed collateral has been legally assigned to CTBI, the estimated fair value of the collateral less costs to sell is then transferred to other real estate owned or other repossessed assets, and a charge-off is taken for any remaining balance. When any unsecured commercial loan is considered uncollectible the loan is charged off no later than at 90 days past due.

All closed-end consumer loans (excluding conventional 1-4 family residential loans and installment and revolving loans secured by real estate) are charged off no later than 120 days (five monthly payments) delinquent. If a loan is considered uncollectible, it is charged off earlier than 120 days delinquent. For conventional 1-4 family residential loans and installment and revolving loans secured by real estate, once the loan is 90 days past due, the loan is placed on nonaccrual if payment in full of principal or interest is not expected. Foreclosure proceedings are normally initiated after 120 days. When the foreclosed property has been legally assigned to CTBI, the fair value less estimated costs to sell is transferred to other real estate owned and the remaining balance is taken as a charge-off.

The risk characteristics of CTBI’s material portfolio segments are as follows:

Hotel/motel loans are a significant concentration for CTBI, representing approximately 10.3% of total loans. This industry has unique risk characteristics as it is highly susceptible to changes in the domestic and global economic environments, which can cause the industry to experience substantial volatility. These loans are viewed primarily as cash flow loans and secondarily as loans secured by real estate. Hotel/motel lending typically involves higher loan principal amounts and the repayment of these loans is generally dependent on the successful operation of the property securing the loan or the business conducted on the property securing the loan. Management monitors and evaluates all commercial real estate loans based on collateral and risk grade criteria. Commercial construction loans generally are made to customers for the purpose of building income-producing properties, and any hotel/motel construction loan would be included in this segment. Personal guarantees of the principals are generally required. Such loans are made on a projected cash flow basis and are secured by the project being constructed. Construction loan draw procedures are included in each specific loan agreement, including required documentation items and inspection requirements. Construction loans may convert to term loans at the end of the construction period, or may be repaid by the take-out commitment from another financing source. If the loan is to convert to a term loan, the repayment ability is based on the borrower’s projected cash flow. Risk is mitigated during the construction phase by requiring proper documentation and inspections whenever a draw is requested.

Commercial real estate residential loans are commercial purpose construction and permanent financed loans for commercial purpose 1-4 family/multi-family properties. All commercial real estate loans are viewed primarily as cash flow loans and secondarily as loans secured by real estate. Management monitors and evaluates all commercial real estate loans based on collateral and risk grade criteria. Commercial residential construction loans generally are made to customers for the purpose of building income-producing properties. Personal guarantees of the principals are generally required. Such loans are made on a projected cash flow basis and are secured by the project being constructed. Construction loan draw procedures are included in each specific loan agreement, including required documentation items and inspection requirements. Construction loans may convert to term loans at the end of the construction period, or may be repaid by the take-out commitment from another financing source. If the loan is to convert to a term loan, the repayment ability is based on the borrower’s projected cash flow. Risk is mitigated during the construction phase by requiring proper documentation and inspections whenever a draw is requested.

Commercial real estate nonresidential loans are secured by nonfarm, nonresidential properties, farmland, and other commercial real estate. Construction for commercial real estate nonresidential loans are also included in this segment as these loans are generally one loan for construction to permanent financing. All commercial real estate loans are viewed primarily as cash flow loans and secondarily as loans secured by real estate. Management monitors and evaluates all commercial real estate loans based on collateral and risk grade criteria. Commercial nonresidential construction loans generally are made to customers for the purpose of building income-producing properties. Personal guarantees of the principals are generally required. Such loans are made on a projected cash flow basis and are secured by the project being constructed. Construction loan draw procedures are included in each specific loan agreement, including required documentation items and inspection requirements. Construction loans may convert to term loans at the end of the construction period, or may be repaid by the take-out commitment from another financing source. If the loan is to convert to a term loan, the repayment ability is based on the borrower’s projected cash flow. Risk is mitigated during the construction phase by requiring proper documentation and inspections whenever a draw is requested.

Dealer floorplans are segmented separately as they are a unique product with unique risk factors. CTBI maintains strict processing procedures over our floorplan product with any exceptions requested by a loan officer approved by the appropriate loan committee and the floorplan manager.

Commercial other loans are primarily based on the identified cash flows of the borrower and secondarily on the underlying collateral provided by the borrower. The cash flows of borrowers, however, may not be as expected and the collateral securing these loans may fluctuate in value. Most commercial loans are secured by the assets being financed or other business assets such as accounts receivable or inventory and may incorporate a personal guarantee; however, some short-term loans may be made on an unsecured basis. In the case of loans secured by accounts receivable, the availability of funds for the repayment of these loans may be substantially dependent on the ability of the borrower to collect amounts due from our customers. As we underwrite our equipment lease financing in a manner similar to our commercial loan portfolio described below, the risk characteristics for this portfolio mirror that of the commercial loan portfolio.

With respect to residential loans that are secured by 1-4 family residences and are generally owner occupied, CTBI generally establishes a maximum loan-to-value ratio and requires private mortgage insurance if that ratio is exceeded. Home equity loans are typically secured by a subordinate interest in 1-4 family residences. Residential construction loans are handled through the home mortgage area of the bank. The repayment ability of the borrower and the maximum loan-to-value ratio are calculated using the normal mortgage lending criteria. Draws are processed based on percentage of completion stages including normal inspection procedures. Such loans generally convert to term loans after the completion of construction.

Consumer loans are secured by consumer assets such as automobiles or recreational vehicles. Some consumer loans are unsecured such as small installment loans and certain lines of credit. Our determination of a borrower’s ability to repay these loans is primarily dependent on the personal income and credit rating of the borrowers, which can be impacted by economic conditions in their market areas such as unemployment levels. Risk is mitigated by the fact that the loans are of smaller individual amounts and spread over a large number of borrowers.

The indirect lending area of the bank is generally responsible for purchasing/funding consumer contracts with new and used automobile dealers. Dealer loan applications are forwarded to the indirect loan processing area for approval or denial. Loan approvals or denials are based on the creditworthiness and repayment ability of the borrowers, and on the collateral value. Upon a dealer being funded on an approved loan application and assignment of the retail installment contract to CTB, CTB will have limited recourse with the dealer, as set forth in the CTB dealer agreement. On occasion, the dealer will execute a separate, full recourse agreement with CTB to obtain customer financing.

CTBI utilizes discounted cash flow loss rate methodologies for all loan segments. Within the discount cash flow calculation, an effective yield of the instrument is calculated, net of the impacts of prepayment assumptions, and the instrument expected cash flows. The expected cash flows were modeled considering probability of default and segment-specific loss given default (“LGD”) risk factors, utilizing the software’s proprietary database of financial institutions’ filings, evaluated first by geography and asset size and then with the utilization of standard deviations, to assure relevance to CTBI’s loan segments along with CTBI’s own loss history. Cash flows are then discounted at that effective yield to produce an instrument-level net present value (“NPV”) of expected cash flows. An ACL is established for the difference between the instrument’s NPV and amortized cost basis. Any changes in NPV between periods is recorded as provision for credit losses. The modeling of expected prepayment speeds, curtailment rates, and time to recovery are based on historical internal data and adjusted, if necessary, based on the reasonable and supportable forecast of economic conditions. Management incorporates qualitative factors to loss estimates used to derive CTBI’s total ACL including delinquency trends, current economic conditions and trends, strength of supervision and administration of the loan portfolio, levels of underperforming loans, underwriting exceptions, and industry concentrations. Forecast factors include gross domestic product, light weight vehicle sales, and S&P/Case-Shiller US National Home Price Index. Management continually reevaluates the other subjective factors included in our ACL analysis.

Goodwill – We evaluate total goodwill for impairment using fair value techniques including multiples of price/equity. Goodwill is evaluated for impairment on an annual basis or as other events may warrant. The balance of goodwill, at $65.5 million, has not changed since January 1, 2015.

Income Taxes – Income tax expense is based on the taxes due on the consolidated tax return plus deferred taxes based on the expected future tax benefits and consequences of temporary differences between carrying amounts and tax bases of assets and liabilities, using enacted tax rates. Any interest and penalties incurred in connection with income taxes are recorded as a component of income tax expense in our consolidated financial statements. During the three months ended March 31, 2025 and 2024, CTBI has not recognized a significant amount of interest expense or penalties in connection with income taxes.

Estimated Credit Losses on Off-Balance Sheet Credit Exposures Recognized as Other Liabilities – CTBI estimates expected credit losses over the contractual period in which it has exposure to credit risk via a contractual obligation to extend credit, unless that obligation is unconditionally cancellable by CTBI. The ACL on off-balance sheet credit exposures recognized in other liabilities is adjusted as an expense in provision for credit losses. The estimate includes consideration of the likelihood that funding will occur and an estimate of expected credit losses on commitments expected to be funded over their estimated lives. Estimating credit losses on unfunded commitments requires CTBI to consider the following categories of off-balance sheet credit exposure: unfunded commitments to extend credit, unfunded lines of credit, and standby letters of credit. Each of these unfunded commitments is then analyzed for a probability of funding to calculate a probable funding amount. The life of loan loss factor by related portfolio segment from the loan ACL calculation is then applied to the probable funding amount to calculate the estimated credit losses on off-balance sheet credit exposures recognized as other liabilities.

Note 2 – Stock-Based Compensation

Restricted stock expense for the three months ended March 31, 2025 and 2024 was $544 thousand and $343 thousand, respectively, including $47 thousand and $40 thousand, respectively, in dividends paid for those periods. As of March 31, 2025, there was a total of $3.8 million of unrecognized compensation expense related to restricted stock grants that will be recognized as expense as the awards vest over a weighted average period of 3.1 years.

The following table shows restricted stock activity for the quarters ended March 31, 2025 and 2024:

March 31	2025					2024
	Grants			Weighted Average Fair Value at Grant		Grants			Weighted Average Fair Value at Grant
Outstanding at beginning of year		86,572		$	43.45		96,840		$	43.75
Granted		38,538			53.53		15,000			41.29
Vested		(25,498	)		43.76		(22,408	)		43.37
Forfeited		0			-		(2,109	)		42.80
Outstanding at end of period		99,612		$	47.27		87,323		$	43.45

The restricted stock was issued pursuant to the terms of CTBI’s 2015 Stock Ownership Incentive Plan. The restrictions on these shares of restricted stock will lapse ratably over four years, subject to such employee’s continued employment, except for 5,000 shares granted in January 2025 pursuant to a management retention restricted stock award which will cliff vest at the end of five years. However, in the event of certain participant employee termination events occurring within 24 months of a change in control of CTBI or the death of the participant, the restrictions will lapse, and in the event of the participant’s disability, the restrictions will lapse on a pro rata basis. The Compensation Committee will have discretion to review and revise restrictions applicable to a participant’s restricted stock in the event of the participant’s retirement. CTBI recognizes forfeitures when they occur.

There was no stock option activity for the quarters ended March 31, 2025 and 2024. There was no compensation expense related to stock option grants for the three months ended March 31, 2025 and 2024 and no unrecognized compensation expense related to unvested stock option awards, as all stock option awards have fully vested.

Note 3 – Securities

The amortized cost and fair value of debt securities at March 31, 2025 are summarized as follows:

Available-for-Sale

(in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
U.S. Treasury and government agencies	$	260,711	$	77	$	(14,534	)	$	246,254
State and political subdivisions		304,358		50		(47,303	)		257,105
Agency mortgage-backed securities		508,292		666		(53,416	)		455,542
Asset-backed securities		49,717		28		(94	)		49,651
Total available-for-sale securities	$	1,123,078	$	821	$	(115,347	)	$	1,008,552

The amortized cost and fair value of debt securities at December 31, 2024 are summarized as follows:

Available-for-Sale

(in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
U.S. Treasury and government agencies	$	360,027	$	84	$	(18,616	)	$	341,495
State and political subdivisions		304,588		12		(51,043	)		253,557
Agency mortgage-backed securities		471,000		131		(61,422	)		409,709
Asset-backed securities		51,034		10		(77	)		50,967
Total available-for-sale securities	$	1,186,649	$	237	$	(131,158	)	$	1,055,728

The amounts reported in the preceding tables exclude accrued interest on securities of $4.0 million and $4.6 million at March 31, 2025 and December 31, 2024, respectively, which is presented as a component of accrued interest receivable in the consolidated balance sheets.

The amortized cost and fair value of debt securities at March 31, 2025 by contractual maturity are shown below. Expected maturities will differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties.

	Available-for-Sale
(in thousands)	Amortized Cost		Fair Value
Due in one year or less	$	89,731	$	87,180
Due after one through five years		212,884		198,130
Due after five through ten years		133,298		115,337
Due after ten years		129,156		102,712
Agency mortgage-backed securities		508,292		455,542
Asset-backed securities		49,717		49,651
Total debt securities	$	1,123,078	$	1,008,552

During the three months ended March 31, 2025, we had an unrealized gain of $480 thousand from the fair value adjustment of equity securities. During the three months ended March 31, 2024, we had an unrealized gain of $371 thousand from the fair value adjustment of equity securities.

The amortized cost of securities pledged as collateral, to secure public deposits and for other purposes, was $627.9 million at March 31, 2025 and $630.8 million at December 31, 2024. The fair value of securities pledged was $567.3 million at March 31, 2025 and $563.2 million at December 31, 2024.

The amortized cost of securities sold under agreements to repurchase amounted to $337.7 million at March 31, 2025 and $330.0 million at December 31, 2024. The fair value of securities pledged was $299.9 million at March 31, 2025 and $292.2 million at December 31, 2024.

CTBI evaluates its investment portfolio on a quarterly basis for impairment. The analysis performed as of March 31, 2025 indicates that all impairment is considered temporary, market and interest rate driven, and not credit-related. The percentage of total debt securities with unrealized losses as of March 31, 2025 was 89.2% compared to 95.5% as of December 31, 2024. The following table provides the amortized cost, gross unrealized losses, and fair value, aggregated by investment category and length of time the individual securities have been in a continuous unrealized loss position as of March 31, 2025 that are not deemed to have credit losses.

Available-for-Sale

(in thousands)	Amortized Cost		Gross Unrealized Losses			Fair Value
Less Than 12 Months
U.S. Treasury and government agencies	$	2,645	$	(3	)	$	2,642
State and political subdivisions		13,009		(162	)		12,847
Agency mortgage-backed securities		33,914		(477	)		33,437
Asset-backed securities		8,039		(35	)		8,004
Total <12 months temporarily impaired AFS securities		57,607		(677	)		56,930

12 Months or More
U.S. Treasury and government agencies		251,329		(14,531	)		236,798
State and political subdivisions		286,800		(47,141	)		239,659
Agency mortgage-backed securities		404,055		(52,939	)		351,116
Asset-backed securities		15,248		(59	)		15,189
Total ≥12 months temporarily impaired AFS securities		957,432		(114,670	)		842,762

Total
U.S. Treasury and government agencies		253,974		(14,534	)		239,440
State and political subdivisions		299,809		(47,303	)		252,506
Agency mortgage-backed securities		437,969		(53,416	)		384,553
Asset-backed securities		23,287		(94	)		23,193
Total temporarily impaired AFS securities	$	1,015,039	$	(115,347	)	$	899,692

The analysis performed as of December 31, 2024 indicated that all impairment was considered temporary, market and interest rate driven, and not credit-related. The following table provides the amortized cost, gross unrealized losses, and fair value, aggregated by investment category and length of time the individual securities have been in a continuous unrealized loss position as of December 31, 2024 that are not deemed to be other-than-temporarily impaired.

Available-for-Sale

(in thousands)	Amortized Cost		Gross Unrealized Losses			Fair Value
Less Than 12 Months
U.S. Treasury and government agencies	$	1,396	$	(2	)	$	1,394
State and political subdivisions		14,262		(192	)		14,070
Agency mortgage-backed securities		28,028		(994	)		27,034
Asset-backed securities		24,545		(14	)		24,531
Total <12 months temporarily impaired AFS securities		68,231		(1,202	)		67,029

12 Months or More
U.S. Treasury and government agencies		351,315		(18,614	)		332,701
State and political subdivisions		288,445		(50,851	)		237,594
Agency mortgage-backed securities		416,270		(60,428	)		355,842
Asset-backed securities		15,579		(63	)		15,516
Total ≥12 months temporarily impaired AFS securities		1,071,609		(129,956	)		941,653

Total
U.S. Treasury and government agencies		352,711		(18,616	)		334,095
State and political subdivisions		302,707		(51,043	)		251,664
Agency mortgage-backed securities		444,298		(61,422	)		382,876
Asset-backed securities		40,124		(77	)		40,047
Total temporarily impaired AFS securities	$	1,139,840	$	(131,158	)	$	1,008,682

U.S. Treasury and Government Agencies

The unrealized losses in U.S. Treasury and government agencies were caused by interest rate changes. CTBI expects to recover the amortized cost basis over the term of the securities. These securities are guaranteed by the U.S. government and are generally considered to be risk-free, which is why CTBI does not record an allowance for credit loss on these investments. Furthermore, CTBI does not intend to sell the investments and it is not more likely than not that we will be required to sell the investments before recovery of their amortized cost.

State and Political Subdivisions

The unrealized losses in securities of state and political subdivisions were caused by interest rate changes. These securities benefit from stable dedicated tax revenues, a legal framework that prioritizes bondholder payments, and third-party bond insurance, which significantly mitigate credit risk. Due to these robust credit protection measures, CTBI does not record an allowance for credit loss on its state and political subdivisions securities. The contractual terms of those investments do not permit the issuer to settle the securities at a price less than par which will equal amortized cost at maturity. Furthermore, CTBI does not intend to sell the investments before recovery of their amortized cost and it is not more likely than not that we will be required to sell the investments before recovery of their amortized cost.

Agency Mortgage-backed Securities

The unrealized losses in agency mortgage-backed securities were caused by interest rate changes. CTBI expects to recover the amortized cost basis over the term of the securities. These securities are either guaranteed by the U.S. government or by the government sponsored enterprise and are generally considered to be risk-free, which is why CTBI does not record an allowance for credit loss on these investments. Furthermore, CTBI does not intend to sell the investments and it is not more likely than not that we will be required to sell the investments before recovery of their amortized cost.

Asset-Backed Securities

The unrealized losses in asset-backed securities were caused by interest rate changes. These securities benefit from structural credit enhancements, which significantly mitigate credit risk. Due to these robust credit protection measures, CTBI does not record an allowance for credit loss on its asset-backed securities. The contractual terms of those investments do not permit the issuer to settle the securities at a price less than par which will equal amortized cost at maturity. CTBI does not intend to sell the investments and it is not more likely than not that we will be required to sell the investments before recovery of their amortized cost.

Equity Securities at Fair Value

Equity securities at fair value as of March 31, 2025 were $4.3 million, as a result of a $480 thousand increase in the fair value in the first quarter of 2025. The fair value of equity securities increased $371 thousand in the first quarter of 2024. No equity securities were sold during the three months ended March 31, 2025 or 2024.

Note 4 – Loans

Major classifications of loans, net of unearned income, deferred loan origination costs and fees, and net premiums on acquired loans, are summarized as follows:

March 31, 2025 (in thousands)	Gross Loans		Unearned Fees/Costs			Unearned Premiums		Net Loans
Hotel/motel	$	475,582	$	0		$	0	$	475,582
Commercial real estate residential		535,427		0			0		535,427
Commercial real estate nonresidential		917,250		(4,012	)		0		913,238
Dealer floorplans		75,101		0			0		75,101
Commercial other		357,870		(14	)		422		358,278
Commercial loans		2,361,230		(4,026	)		422		2,357,626

Real estate mortgage		1,063,360		3,613			0		1,066,973
Home equity lines		172,688		0			0		172,688
Residential loans		1,236,048		3,613			0		1,239,661

Consumer direct		150,614		0			0		150,614
Consumer indirect		854,634		460			33,541		888,635
Consumer loans		1,005,248		460			33,541		1,039,249

Loans and lease financing	$	4,602,526	$	47		$	33,963	$	4,636,536

December 31, 2024 (in thousands)	Gross Loans		Unearned Fees/Costs			Unearned Premiums		Net Loans
Hotel/motel	$	458,832	$	0		$	0	$	458,832
Commercial real estate residential		508,310		0			0		508,310
Commercial real estate nonresidential		868,993		(3,962	)		0		865,031
Dealer floorplans		84,956		0			0		84,956
Commercial other		355,568		(18	)		0		355,550
Commercial loans		2,276,659		(3,980	)		0		2,272,679

Real estate mortgage		1,039,777		3,624			0		1,043,401
Home equity lines		167,425		0			0		167,425
Residential loans		1,207,202		3,624			0		1,210,826

Consumer direct		152,843		0			0		152,843
Consumer indirect		817,893		357			32,039		850,289
Consumer loans		970,736		357			32,039		1,003,132

Loans and lease financing	$	4,454,597	$	1		$	32,039	$	4,486,637

CTBI has segregated and evaluates our loan portfolio through nine portfolio segments with similar risk characteristics. CTBI serves customers in small and mid-sized communities in eastern, northeastern, central, and south central Kentucky, southern West Virginia, and northeastern Tennessee. Therefore, CTBI’s exposure to credit risk is significantly affected by changes in these communities.

Commercial real estate residential loans are commercial purpose construction and permanent financed loans for commercial purpose 1-4 family/multi-family properties. These loans are originated based on the borrower’s ability to service the debt and secondarily based on the fair value of the underlying collateral.

Commercial real estate nonresidential loans are secured by nonfarm, nonresidential properties, farmland, and other commercial real estate. These loans are originated based on the borrower’s ability to service the debt and secondarily based on the fair value of the underlying collateral. Construction for commercial real estate nonresidential loans are also included in this segment as these loans are generally one loan for construction to permanent financing.

Dealer floorplans consist of loans to dealerships to finance inventory and are collateralized under a blanket security agreement whereby all vehicle inventory is collateral against the outstanding loan without specific liens on individual units. Advances are made for the dealer cost of individual vehicles in inventory, and the loan is repaid from the proceeds from the sale of the financed vehicle. This risk is mitigated by the use of monthly inventory audits and follow-up is required on any out of compliance items identified. These audits are subject to increasing frequency when fact patterns suggest more scrutiny is required. Additional collateral or other credit enhancements (for example, personal guarantees from dealership owners) are typically obtained to further mitigate credit risk.

Commercial other loans consist of agricultural loans, receivable financing, loans to financial institutions, loans for purchasing or carrying securities, and other commercial purpose loans. Commercial loans are underwritten based on the borrower’s ability to service debt from the business’s underlying cash flows. As a general practice, we obtain collateral such as equipment, or other assets, although such loans may be uncollateralized but guaranteed.

Residential real estate loans are a mixture of fixed rate and adjustable rate first and second lien residential mortgage loans and also include real estate construction loans which are typically for owner-occupied properties. The terms of the real estate construction loans are generally short-term with permanent financing upon completion. As a policy, CTBI holds adjustable rate loans and sells the majority of our fixed rate first lien mortgage loans into the secondary market with those loans classified as held for sale and not included in loan balances. Changes in interest rates or market conditions may impact a borrower’s ability to meet contractual principal and interest payments. Residential real estate loans are secured by real property.

Home equity lines are primarily revolving adjustable rate credit lines secured by real property.

Consumer direct loans are a mixture of fixed rate and adjustable rate products comprised of unsecured loans, consumer revolving credit lines, deposit secured loans, and all other consumer purpose loans.

Indirect loans are primarily fixed rate consumer loans secured by automobiles, trucks, vans, and recreational vehicles originated at the selling dealership underwritten and purchased by CTBI’s indirect lending department. Both new and used products are financed. Only dealers who have executed dealer agreements with CTBI participate in the indirect lending program.

Loans identified to be sold into the secondary market are classified as held for sale and are not included in the loans balance above. Loans held for sale are recorded at lower of cost or fair value and were $0.2 million at December 31, 2024. Accrued interest receivable for loan balances was $18.3 million at March 31, 2025 and $18.7 million at December 31, 2024.

Allowance for Credit Losses

The following tables present the balance in the ACL for the three months ended March 31, 2025 and March 31, 2024.

	Three Months Ended March 31, 2025
(in thousands)	Beginning Balance		Provision Charged to Expense			Losses Charged Off			Recoveries		Ending Balance
ACL
Hotel/motel	$	5,208	$	386		$	0		$	0	$	5,594
Commercial real estate residential		5,467		605			(18	)		5		6,059
Commercial real estate nonresidential		10,307		1,072			(2	)		4		11,381
Dealer floorplans		682		(131	)		0			0		551
Commercial other		3,832		428			(404	)		80		3,936
Real estate mortgage		12,504		(116	)		(78	)		12		12,322
Home equity		1,499		(199	)		0			9		1,309
Consumer direct		2,221		93			(268	)		81		2,127
Consumer indirect		13,248		1,430			(1,952	)		956		13,682
Total ACL	$	54,968	$	3,568		$	(2,722	)	$	1,147	$	56,961

	Three Months Ended March 31, 2024
(in thousands)	Beginning Balance		Provision Charged to Expense			Losses Charged Off			Recoveries		Ending Balance
ACL
Hotel/motel	$	4,592	$	348		$	0		$	0	$	4,940
Commercial real estate residential		4,285		(161	)		0			4		4,128
Commercial real estate nonresidential		7,560		615			0			3		8,178
Dealer floorplans		659		62			0			0		721
Commercial other		3,760		114			(167	)		92		3,799
Real estate mortgage		10,197		141			(27	)		14		10,325
Home equity		1,367		(65	)		0			2		1,304
Consumer direct		3,261		803			(533	)		40		3,571
Consumer indirect		13,862		799			(1,940	)		884		13,605
Total ACL	$	49,543	$	2,656		$	(2,667	)	$	1,039	$	50,571

Nonaccrual loans and loans 90 days past due and still accruing, segregated by loan segment, as of March 31, 2025 and December 31, 2024 were as follows:

	March 31, 2025
(in thousands)	Nonaccrual Loans with No ACL		Nonaccrual Loans with ACL		90+ and Still Accruing		Total Nonperforming Loans

Commercial real estate residential	$	18	$	1,097	$	1,840	$	2,955
Commercial real estate nonresidential		8,000		1,625		3,354		12,979
Commercial other		517		1,183		148		1,848
Total commercial loans		8,535		3,905		5,342		17,782

Real estate mortgage		0		2,866		4,443		7,309
Home equity lines		0		210		383		593
Total residential loans		0		3,076		4,826		7,902

Consumer direct		0		176		18		194
Consumer indirect		0		0		649		649
Total consumer loans		0		176		667		843

Loans and lease financing	$	8,535	$	7,157	$	10,835	$	26,527

	December 31, 2024
(in thousands)	Nonaccrual Loans with No ACL		Nonaccrual Loans with ACL		90+ and Still Accruing		Total Nonperforming Loans

Commercial real estate residential	$	0	$	1,248	$	369	$	1,617
Commercial real estate nonresidential		8,000		1,641		3,513		13,154
Commercial other		246		1,106		64		1,416
Total commercial loans		8,246		3,995		3,946		16,187

Real estate mortgage		0		3,748		5,072		8,820
Home equity lines		0		204		444		648
Total residential loans		0		3,952		5,516		9,468

Consumer direct		0		176		93		269
Consumer indirect		0		0		762		762
Total consumer loans		0		176		855		1,031

Loans and lease financing	$	8,246	$	8,123	$	10,317	$	26,686

Interest income recognized as of March 31, 2025 on nonaccrual loans totaled $4.4 thousand compared to $189.4 thousand at December 31, 2024.

The following tables present CTBI’s loan portfolio aging analysis, segregated by loan segment, as of March 31, 2025 and December 31, 2024 (includes loans 90 days past due and still accruing as well):

	March 31, 2025
(in thousands)	30-59 Days Past Due		60-89 Days Past Due		90+ Days Past Due		Total Past Due		Current		Total Loans
Hotel/motel	$	0	$	0	$	0	$	0	$	475,582	$	475,582
Commercial real estate residential		1,109		354		2,279		3,742		531,685		535,427
Commercial real estate nonresidential		467		1,575		12,723		14,765		898,473		913,238
Dealer floorplans		0		0		0		0		75,101		75,101
Commercial other		377		197		1,376		1,950		356,328		358,278
Total commercial loans		1,953		2,126		16,378		20,457		2,337,169		2,357,626

Real estate mortgage		873		2,906		6,295		10,074		1,056,899		1,066,973
Home equity lines		1,075		234		523		1,832		170,856		172,688
Total residential loans		1,948		3,140		6,818		11,906		1,227,755		1,239,661

Consumer direct		691		100		194		985		149,629		150,614
Consumer indirect		4,045		818		649		5,512		883,123		888,635
Total consumer loans		4,736		918		843		6,497		1,032,752		1,039,249

Loans and lease financing	$	8,637	$	6,184	$	24,039	$	38,860	$	4,597,676	$	4,636,536

	December 31, 2024
(in thousands)	30-59 Days Past Due		60-89 Days Past Due		90+ Days Past Due		Total Past Due		Current		Total Loans
Hotel/motel	$	0	$	0	$	0	$	0	$	458,832	$	458,832
Commercial real estate residential		575		444		828		1,847		506,463		508,310
Commercial real estate nonresidential		1,349		118		12,890		14,357		850,674		865,031
Dealer floorplans		0		0		0		0		84,956		84,956
Commercial other		1,033		595		1,018		2,646		352,904		355,550
Total commercial loans		2,957		1,157		14,736		18,850		2,253,829		2,272,679

Real estate mortgage		654		3,304		7,998		11,956		1,031,445		1,043,401
Home equity lines		1,919		348		613		2,880		164,545		167,425
Total residential loans		2,573		3,652		8,611		14,836		1,195,990		1,210,826

Consumer direct		876		107		268		1,251		151,592		152,843
Consumer indirect		4,872		1,096		762		6,730		843,559		850,289
Total consumer loans		5,748		1,203		1,030		7,981		995,151		1,003,132

Loans and lease financing	$	11,278	$	6,012	$	24,377	$	41,667	$	4,444,970	$	4,486,637

Credit Quality Indicators

CTBI categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. CTBI also considers the fair value of the underlying collateral and the strength and willingness of the guarantor(s). CTBI analyzes commercial loans individually by classifying the loans as to credit risk. Loans classified as loss, doubtful, substandard, or special mention are reviewed quarterly by CTBI for further deterioration or improvement to determine if appropriately classified and valued if deemed impaired. All other commercial loan reviews are completed every 12 to 18 months. In addition, during the renewal process of any loan, as well as if a loan becomes past due or if other information becomes available, CTBI will evaluate the loan grade. CTBI uses the following definitions for risk ratings:

➢

Pass grades include investment grade, low risk, moderate risk, and acceptable risk loans. The loans range from loans that have no chance of resulting in a loss to loans that have a limited chance of resulting in a loss. Customers in this grade have excellent to fair credit ratings. The cash flows are adequate to meet required debt repayments.

➢

Watch graded loans are loans that warrant extra management attention but are not currently criticized. Loans on the watch list may be potential troubled credits or may warrant “watch” status for a reason not directly related to the asset quality of the credit. The watch grade is a management tool to identify credits which may be candidates for future classification or may temporarily warrant extra management monitoring.

➢

Other assets especially mentioned (OAEM) reflects loans that are currently protected but are potentially weak. These loans constitute an undue and unwarranted credit risk but not to the point of justifying a classification of substandard. The credit risk may be relatively minor yet constitute an unwarranted risk in light of circumstances surrounding a specific asset. Loans in this grade display potential weaknesses which may, if unchecked or uncorrected, inadequately protect CTBI’s credit position at some future date. The loans may be adversely affected by economic or market conditions.

➢

Substandard grading indicates that the loan is inadequately protected by the current sound worth and paying capacity of the obligor or of the collateral pledged. These loans have a well-defined weakness or weaknesses that jeopardize the orderly liquidation of the debt with the distinct possibility that CTBI will sustain some loss if the deficiencies are not corrected.

➢

Doubtful graded loans have the weaknesses inherent in the substandard grading with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable. The probability of loss is extremely high, but because of certain important and reasonably specific pending factors which may work to CTBI’s advantage or strengthen the asset(s), its classification as an estimated loss is deferred until its more exact status may be determined. Pending factors include proposed merger, acquisition, or liquidation procedures, capital injection, perfecting liens on additional collateral, and refinancing plans.

The following tables present the credit risk profile of CTBI’s commercial loan portfolio based on rating category and payment activity, segregated by loan segment and based on last credit decision or year of origination:

	Term Loans Amortized Cost Basis by Origination Year As of March 31, 2025
(in thousands)	2025			2024			2023			2022			2021		Prior			Revolving Loans		Total
Hotel/motel
Risk rating:
Pass	$	18,208		$	69,724		$	90,525		$	140,023		$	26,919	$	90,850		$	5,654	$	441,903
Watch		0			0			2,049			8,039			6,480		11,428			0		27,996
OAEM		0			0			0			0			0		0			0		0
Substandard		0			1,704			0			3,979			0		0			0		5,683
Doubtful		0			0			0			0			0		0			0		0
Total hotel/motel		18,208			71,428			92,574			152,041			33,399		102,278			5,654		475,582

Hotel/motel year-to-date gross charge-offs		0			0			0			0			0		0			0		0

Commercial real estate residential
Risk rating:
Pass		53,960			149,954			90,793			77,102			56,245		55,701			22,111		505,866
Watch		4,207			1,381			3,092			1,618			3,671		6,272			919		21,160
OAEM		0			0			0			0			0		56			0		56
Substandard		578			942			603			770			2,080		3,323			48		8,344
Doubtful		0			0			0			0			0		1			0		1
Total commercial real estate residential		58,745			152,277			94,488			79,490			61,996		65,353			23,078		535,427

Commercial real estate residential year-to-date gross charge-offs		0			(18	)		0			0			0		0			0		(18	)

Commercial real estate nonresidential
Risk rating:
Pass		68,209			179,023			120,197			115,340			110,131		203,215			40,051		836,166
Watch		94			4,778			2,374			9,798			16,848		10,464			819		45,175
OAEM		0			0			0			101			0		816			0		917
Substandard		2,932			2,486			1,613			267			2,715		20,966			0		30,979
Doubtful		0			0			0			0			0		1			0		1
Total commercial real estate nonresidential		71,235			186,287			124,184			125,506			129,694		235,462			40,870		913,238

Commercial real estate nonresidential year-to-date gross charge-offs		0			0			0			0			0		(2	)		0		(2	)

Dealer floorplans
Risk rating:
Pass		0			0			0			0			0		0			65,137		65,137
Watch		0			0			0			0			0		0			9,678		9,678
OAEM		0			0			0			0			0		0			0		0
Substandard		0			0			0			0			0		0			0		0
Doubtful		0			0			0			0			0		0			286		286
Total dealer floorplans		0			0			0			0			0		0			75,101		75,101

Dealer floorplans year-to-date gross charge-offs		0			0			0			0			0		0			0		0

Commercial other
Risk rating:
Pass		34,359			60,441			42,671			33,240			24,659		43,435			80,590		319,395
Watch		629			1,533			799			648			266		564			15,054		19,493
OAEM		0			0			0			0			8,327		0			329		8,656
Substandard		1,829			1,781			3,912			1,005			456		554			1,197		10,734
Doubtful		0			0			0			0			0		0			0		0
Total commercial other		36,817			63,755			47,382			34,893			33,708		44,553			97,170		358,278

Commercial other year-to-date gross charge-offs		(176	)		(86	)		(136	)		(6	)		0		0			0		(404	)

Commercial loans
Risk rating:
Pass		174,736			459,142			344,186			365,705			217,954		393,201			213,543		2,168,467
Watch		4,930			7,692			8,314			20,103			27,265		28,728			26,470		123,502
OAEM		0			0			0			101			8,327		872			329		9,629
Substandard		5,339			6,913			6,128			6,021			5,251		24,843			1,245		55,740
Doubtful		0			0			0			0			0		2			286		288
Total commercial loans	$	185,005		$	473,747		$	358,628		$	391,930		$	258,797	$	447,646		$	241,873	$	2,357,626

Total commercial loans year-to-date gross charge-offs	$	(176	)	$	(104	)	$	(136	)	$	(6	)	$	0	$	(2	)	$	0	$	(424	)

	Term Loans Amortized Cost Basis by Origination Year As of December 31, 2024
(in thousands)	2024			2023			2022			2021			2020			Prior			Revolving Loans		Total
Hotel/motel
Risk rating:
Pass	$	72,924		$	88,016		$	134,663		$	27,145		$	21,609		$	70,311		$	5,419	$	420,087
Watch		0			2,062			10,822			6,570			0			13,358			0		32,812
OAEM		0			0			0			0			0			0			0		0
Substandard		1,954			0			3,979			0			0			0			0		5,933
Doubtful		0			0			0			0			0			0			0		0
Total hotel/motel		74,878			90,078			149,464			33,715			21,609			83,669			5,419		458,832

Hotel/motel year-to-date gross charge-offs		0			0			0			0			0			0			0		0

Commercial real estate residential
Risk rating:
Pass		162,855			94,758			78,106			60,482			24,603			37,689			21,267		479,760
Watch		5,381			3,009			1,692			3,739			1,523			5,261			58		20,663
OAEM		31			0			0			0			0			58			0		89
Substandard		1,470			609			792			531			420			3,928			48		7,798
Doubtful		0			0			0			0			0			0			0		0
Total commercial real estate residential		169,737			98,376			80,590			64,752			26,546			46,936			21,373		508,310

Commercial real estate residential year-to-date gross charge-offs		0			0			0			0			0			0			0		0

Commercial real estate nonresidential
Risk rating:
Pass		180,139			121,801			124,200			120,623			62,674			155,561			38,270		803,268
Watch		4,574			2,004			4,004			8,683			3,425			6,970			624		30,284
OAEM		0			7			12			0			0			45			0		64
Substandard		4,873			1,527			357			2,700			11,179			10,778			0		31,414
Doubtful		0			0			0			0			0			1			0		1
Total commercial real estate nonresidential		189,586			125,339			128,573			132,006			77,278			173,355			38,894		865,031

Commercial real estate nonresidential year-to-date gross charge-offs		0			0			0			0			0			0			0		0

Dealer floorplans
Risk rating:
Pass		0			0			0			0			0			0			82,639		82,639
Watch		0			0			0			0			0			0			1,861		1,861
OAEM		0			0			0			0			0			0			0		0
Substandard		0			0			0			0			0			456			0		456
Doubtful		0			0			0			0			0			0			0		0
Total dealer floorplans		0			0			0			0			0			456			84,500		84,956

Dealer floorplans year-to-date gross charge-offs		0			0			0			0			0			0			0		0

Commercial other
Risk rating:
Pass		83,742			43,935			38,912			25,806			25,187			19,520			79,851		316,953
Watch		1,823			877			671			295			111			533			14,739		19,049
OAEM		27			0			0			8,469			0			0			30		8,526
Substandard		2,301			4,279			2,203			299			447			162			1,331		11,022
Doubtful		0			0			0			0			0			0			0		0
Total commercial other		87,893			49,091			41,786			34,869			25,745			20,215			95,951		355,550

Commercial other year-to-date gross charge-offs		(1,148	)		(134	)		(142	)		(45	)		(2	)		(5	)		0		(1,476	)

Commercial loans
Risk rating:
Pass		499,660			348,510			375,881			234,056			134,073			283,081			227,446		2,102,707
Watch		11,778			7,952			17,189			19,287			5,059			26,122			17,282		104,669
OAEM		58			7			12			8,469			0			103			30		8,679
Substandard		10,598			6,415			7,331			3,530			12,046			15,324			1,379		56,623
Doubtful		0			0			0			0			0			1			0		1
Total commercial loans	$	522,094		$	362,884		$	400,413		$	265,342		$	151,178		$	324,631		$	246,137	$	2,272,679

Total commercial loans year-to-date gross charge-offs	$	(1,148	)	$	(134	)	$	(142	)	$	(45	)	$	(2	)	$	(5	)	$	0	$	(1,476	)

The following tables present the credit risk profile of CTBI’s residential real estate and consumer loan portfolios based on performing or nonperforming status, segregated by loan segment:

	Term Loans Amortized Cost Basis by Origination Year As of March 31,2025
(in thousands)	2025		2024			2023			2022			2021			Prior			Revolving Loans		Total
Home equity lines
Performing	$	0	$	0		$	0		$	0		$	0		$	6,763		$	165,332	$	172,095
Nonperforming		0		0			0			0			0			336			257		593
Total home equity lines		0		0			0			0			0			7,099			165,589		172,688

Home Equity year-to-date gross charge-offs		0		0			0			0			0			0			0		0

Mortgage loans
Performing		47,465		207,260			186,666			139,380			144,038			334,855			0		1,059,664
Nonperforming		122		1,063			1,033			1,832			225			3,034			0		7,309
Total mortgage loans		47,587		208,323			187,699			141,212			144,263			337,889			0		1,066,973

Mortgage loans year-to-date gross charge-offs		0		0			0			(37	)		(16	)		(25	)		0		(78	)

Residential loans
Performing		47,465		207,260			186,666			139,380			144,038			341,618			165,332		1,231,759
Nonperforming		122		1,063			1,033			1,832			225			3,370			257		7,902
Total residential loans	$	47,587	$	208,323		$	187,699		$	141,212		$	144,263		$	344,988		$	165,589	$	1,239,661

Total residential loans year-to-date gross charge-offs	$	0	$	0		$	0		$	(37	)	$	(16	)	$	(25	)	$	0	$	(78	)

Consumer direct loans
Performing	$	15,381	$	46,091		$	31,462		$	19,428		$	16,248		$	21,810		$	0	$	150,420
Nonperforming		0		0			0			194			0			0			0		194
Total consumer direct loans		15,381		46,091			31,462			19,622			16,248			21,810			0		150,614

Consumer direct loans year-to-date gross charge-offs		0		(74	)		(105	)		(67	)		(9	)		(13	)		0		(268	)

Consumer indirect loans
Performing		137,396		299,881			218,910			142,575			54,619			34,605			0		887,986
Nonperforming		0		236			121			230			47			15			0		649
Total consumer indirect loans		137,396		300,117			219,031			142,805			54,666			34,620			0		888,635

Consumer indirect loans year-to-date gross charge-offs		0		(247	)		(868	)		(551	)		(180	)		(106	)		0		(1,952	)

Consumer loans
Performing		152,777		345,972			250,372			162,003			70,867			56,415			0		1,038,406
Nonperforming		0		236			121			424			47			15			0		843
Total consumer loans	$	152,777	$	346,208		$	250,493		$	162,427		$	70,914		$	56,430		$	0	$	1,039,249

Total consumer loans year-to-date gross charge-offs	$	0	$	(321	)	$	(973	)	$	(618	)	$	(189	)	$	(119	)	$	0	$	(2,220	)

	Term Loans Amortized Cost Basis by Origination Year As of December 31, 2024
(in thousands)	2024			2023			2022			2021			2020			Prior			Revolving Loans		Total
Home equity lines
Performing	$	0		$	0		$	0		$	0		$	0		$	7,121		$	159,656	$	166,777
Nonperforming		0			0			0			0			0			362			286		648
Total home equity lines		0			0			0			0			0			7,483			159,942		167,425

Home equity lines year-to-date gross charge-offs		0			0			0			0			0			(80	)		0		(80	)

Mortgage loans
Performing		197,756			192,959			140,265			146,391			107,009			250,201			0		1,034,581
Nonperforming		0			1,074			1,424			250			279			5,793			0		8,820
Total mortgage loans		197,756			194,033			141,689			146,641			107,288			255,994			0		1,043,401

Mortgage loans year-to-date gross charge-offs		0			0			(28	)		0			0			(97	)		0		(125	)

Residential loans
Performing		197,756			192,959			140,265			146,391			107,009			257,322			159,656		1,201,358
Nonperforming		0			1,074			1,424			250			279			6,155			286		9,468
Total residential loans	$	197,756		$	194,033		$	141,689		$	146,641		$	107,288		$	263,477		$	159,942	$	1,210,826

Total residential loans year-to-date gross charge-offs	$	0		$	0		$	0		$	(28	)	$	0		$	(177	)	$	0	$	(205	)

Consumer direct loans
Performing	$	54,745		$	35,179		$	21,456		$	17,509		$	9,839		$	13,846		$	0	$	152,574
Nonperforming		7			72			190			0			0			0			0		269
Total consumer direct loans		54,752			35,251			21,646			17,509			9,839			13,846			0		152,843

Consumer direct loans year-to-date gross charge-offs		(41	)		(314	)		(690	)		(85	)		(29	)		(61	)		0		(1,220	)

Consumer indirect loans
Performing		333,945			243,247			162,051			65,032			34,870			10,382			0		849,527
Nonperforming		117			324			218			63			40			0			0		762
Total consumer indirect loans		334,062			243,571			162,269			65,095			34,910			10,382			0		850,289

Consumer indirect loans year-to-date gross charge-offs		(363	)		(2,760	)		(2,609	)		(1,385	)		(236	)		(249	)		0		(7,602	)

Consumer loans
Performing		388,690			278,426			183,507			82,541			44,709			24,228			0		1,002,101
Nonperforming		124			396			408			63			40			0			0		1,031
Total consumer loans	$	388,814		$	278,822		$	183,915		$	82,604		$	44,749		$	24,228		$	0	$	1,003,132

Total consumer loans year-to-date gross charge-offs	$	(404	)	$	(3,074	)	$	(3,299	)	$	(1,470	)	$	(265	)	$	(310	)	$	0	$	(8,822	)

The total of consumer mortgage loans secured by real estate properties for which formal foreclosure proceedings are in process was $3.4 million at March 31, 2025 and $4.0 million at December 31, 2024.

Individually Evaluated Loans

If a loan does not share risk characteristics with other pooled loans in determining the ACL, the loan is evaluated for expected credit losses on an individual basis. Of the loans that CTBI has individually evaluated, the loans listed below by segment are those that are collateral dependent:

	March 31, 2025
(in thousands)	Number of Loans		Recorded Investment		Specific Reserve
Hotel/motel		2	$	5,305	$	0
Commercial real estate residential		1		1,526		0
Commercial real estate nonresidential		8		26,999		325
Dealer floorplans		1		9,678		0
Commercial other		3		12,642		0
Total collateral dependent loans		15	$	56,150	$	325

	December 31, 2024
(in thousands)	Number of Loans		Recorded Investment		Specific Reserve
Hotel/motel		2	$	5,555	$	0
Commercial real estate residential		0		0		0
Commercial real estate nonresidential		8		27,087		325
Commercial other		3		12,963		0
Total collateral dependent loans		13	$	45,605	$	325

The hotel/motel, commercial real estate residential, and commercial real estate nonresidential segments are all collateralized with real estate. Two loans listed in the commercial other segment at March 31, 2025 are collateralized by inventory, equipment, and accounts receivable. The dealer floorplan is collateralized with automobiles.

Loan Modifications

Certain loans have been modified where the customer is facing financial difficulty and economic concessions were granted to borrowers, consisting of reductions in the interest rates, payment extensions, forgiveness of principal, and forbearances. These loans, segregated by loan segment and concession granted, are presented below for the quarter ended March 31, 2025:

	Amortized Cost at March 31, 2025
(in thousands)	Interest Rate Reduction			% of total			Term Extension			% of total
Hotel/motel		$	0		0.00	%		$	0		0.00	%
Commercial real estate residential			0		0.00				0		0.00
Commercial real estate nonresidential			129		0.01				2,558		0.28
Dealer floorplans			0		0.00				0		0.00
Commercial other			0		0.00				985		0.27
Commercial loans			129		0.01				3,543		0.15

Real estate mortgage			321		0.03				2,908		0.27
Home equity lines			0		0.00				216		0.13
Residential loans			321		0.03				3,124		0.25

Consumer direct			0		0.00				48		0.03
Consumer indirect			0		0.00				203		0.02
Consumer loans			0		0.00				251		0.02

Loans and lease financing		$	450		0.01	%		$	6,918		0.15	%

	Amortized Cost at March 31, 2025
(in thousands)	Combination – Term Extension and Interest Rate Reduction			% of total			Payment Change			% of total
Hotel/motel		$	0		0.00	%		$	0		0.00	%
Commercial real estate residential			460		0.09				250		0.05
Commercial real estate nonresidential			0		0.00				261		0.03
Dealer floorplans			0		0.00				0		0.00
Commercial other			401		0.11				496		0.14
Commercial loans			861		0.04				1,007		0.04

Real estate mortgage			54		0.01				0		0.00
Home equity lines			0		0.00				0		0.00
Residential loans			54		0.00				0		0.00

Consumer direct			0		0.00				0		0.00
Consumer indirect			0		0.00				106		0.01
Consumer loans			0		0.00				106		0.01

Loans and lease financing		$	915		0.02	%		$	1,113		0.02	%

These loans, segregated by loan segment and concession granted, are presented below for the quarter ended March 31, 2024:

	Amortized Cost at March 31, 2024
(in thousands)		Interest Rate Reduction		% of total			Term Extension		% of total
Hotel/motel		$	0		0.00	%	$	0		0.00	%
Commercial real estate residential			0		0.00			65		0.01
Commercial real estate nonresidential			0		0.00			0		0.00
Dealer floorplans			0		0.00			0		0.00
Commercial other			0		0.00			1,517		0.47
Commercial loans			0		0.00			1,582		0.08

Real estate mortgage			189		0.02			2,782		0.29
Home equity lines			0		0.00			32		0.02
Residential loans			189		0.02			2,814		0.25

Consumer direct			0		0.00			38		0.02
Consumer indirect			0		0.00			269		0.03
Consumer loans			0		0.00			307		0.03

Loans and lease financing		$	189		0.00	%	$	4,703		0.11	%

	Amortized Cost at March 31, 2024
(in thousands)		Combination – Term Extension and Interest Rate Reduction		% of total			Payment Change		% of total
Hotel/motel		$	0		0.00	%	$	0		0.00	%
Commercial real estate residential			15		0.00			0		0.00
Commercial real estate nonresidential			28		0.00			11		0.00
Dealer floorplans			0		0.00			0		0.00
Commercial other			0		0.00			858		0.27
Commercial loans			43		0.00			869		0.04

Real estate mortgage			278		0.03			0		0.00
Home equity lines			39		0.03			0		0.00
Residential loans			317		0.03			0		0.00

Consumer direct			0		0.00			0		0.00
Consumer indirect			0		0.00			25		0.00
Consumer loans			0		0.00			25		0.00

Loans and lease financing		$	360		0.01	%	$	894		0.02	%

The following tables describe the financial effect of the modifications made to borrowers experiencing financial difficulty for the three months ended March 31, 2025:

	Interest Rate Reduction	Term Extension
Loan Type	Financial Impact	Financial Impact
Commercial real estate residential	Weighted-average contractual interest rate remained at 9.5%

Commercial real estate nonresidential		Added a weighted-average 1.2 years to life of the loans

Commercial other		Added a weighted-average 4.8 years to life of the loans

Real estate mortgage	Reduced weighted-average contractual interest rate from 7.8% to 4.5%	Added a weighted-average 0.4 years to life of the loans

Home equity lines		Added a weighted-average 2.1 years to life of the loans

Consumer direct		Added a weighted-average 0.1 years to life of the loans

Consumer indirect		Added a weighted-average 1.0 years to life of the loans

	Combination – Term Extension and Interest Rate Reduction	Payment Changes
Loan Type	Financial Impact	Financial Impact
Commercial real estate residential	Reduced weighted-average contractual interest rate from 8.9% to 7.5% and increased the weighted-average life by 12.2 years	Provided payment changes that will be added to the end of the original loan term

Commercial real estate nonresidential		Provided payment changes that will be added to the end of the original loan term

Commercial other	Increased weighted-average contractual interest rate from 5.1% to 8.0% and increased the weighted-average life by 9.6 years	Provided payment changes that will be added to the end of the original loan term

Real estate mortgage	Reduced weighted-average contractual interest rate from 6.0% to 3.0% and increased the weighted-average life by 1.8 years

Consumer indirect		Provided payment changes that will be added to the end of the original loan term

The following tables describe the financial effect of the modifications made to borrowers experiencing financial difficulty for the quarter ended March 31, 2024:

Loan Type	Interest Rate Reduction Financial Impact	Term Extension Financial Impact
Commercial real estate residential		Added a weighted-average 0.3 years to life of the loans

Commercial other		Added a weighted-average 0.5 years to life of the loans

Real estate mortgage	Reduced weighted-average contractual interest rate from 9.8% to 5.0%	Added a weighted-average 0.4 years to life of the loans

Home equity lines		Added a weighted-average 0.5 years to life of the loans

Consumer direct		Added a weighted-average 0.1 years to life of the loans

Consumer indirect		Added a weighted-average 0.1 years to life of the loans

Loan Type	Combination – Term Extension and Interest Rate Reduction Financial Impact	Payment Changes Financial Impact
Commercial real estate residential	Weighted-average contractual interest rate remained at 8.5% and increased the weighted-average life by 4.0 years

Commercial real estate nonresidential	Weighted-average contractual interest rate remained at 6.0% and increased the weighted-average life by 10.3 years	Provided payment changes that will be added to the end of the original loan term.

Commercial other		Provided payment changes that will be added to the end of the original loan term.

Real estate mortgage	Reduced weighted-average contractual interest rate from 5.3% to 5.2% and increased the weighted-average life by 5 years

Home equity lines	Reduced weighted-average contractual interest rate from 10.0% to 8.5% and increased the weighted-average life by 17.7 years

Consumer indirect		Provided payment changes that will be added to the end of the original loan term.

Loans retain their accrual status at the time of their modification. As a result, if a loan is on nonaccrual at the time it is modified, it stays as nonaccrual, and if a loan is on accrual at the time of the modification, it generally stays on accrual. Commercial and consumer loans modified due to a borrower’s financial difficulty are closely monitored for delinquency as an early indicator of possible future default. If a loan to a borrower experiencing financial difficulty subsequently defaults, CTBI evaluates the loan for possible further impairment. The table below represents the payment status of loans to borrowers experiencing financial difficulty for the past 12 months as of March 31, 2025.

	Past Due Status (Amortized Cost Basis)
(in thousands)	Current			30-89 Days		90+ Days	Nonaccrual
Hotel/motel	$	1,704	$	0	$	0	$	0
Commercial real estate residential		1,088		0		0		620
Commercial real estate nonresidential		10,631		0		45		0
Dealer floorplans		286		0		0		0
Commercial other		3,041		29		0		274
Real estate mortgage		11,279		452		740		219
Home equity lines		329		32		0		0
Consumer direct		136		0		0		0
Consumer indirect		502		20		0		0
Loans to borrowers experiencing financial difficulty	$	28,996	$	533	$	785	$	1,113

The allowance for credit losses may be increased, adjustments may be made in the allocation of the allowance, or partial charge-offs may be taken to further write-down the carrying value of the loan. During the quarter ended March 31, 2025, there were 8 loans to borrowers experiencing financial difficulty that subsequently defaulted. CTBI considers a loan in default when it is 90 days or more past due or transferred to nonaccrual. Presented below, segregated by segment, are loans to borrowers experiencing financial difficulty for which there was a payment default during the periods indicated and such default was within 12 months of the loan modification.

	Three Months Ended March 31, 2025
(in thousands)	Number of Loans		Recorded Balance
Commercial:
Commercial real estate residential		1		$	18
Commercial real estate nonresidential		1			45
Commercial other		1			243
Residential:
Real estate mortgage		5			362
Loans to borrowers experiencing financial difficulty		8		$	668

Financial instrument credit losses apply to off-balance sheet credit exposures such as unfunded loan commitments and standby letters of credit. A liability for expected credit losses for off-balance sheet exposures is recognized if the entity has a present contractual obligation to extend the credit and the obligation is not unconditionally cancellable by the entity. Changes in this allowance are reflected in provision expense. The total unfunded commitment off-balance sheet credit exposure at March 31, 2025 and 2024 is presented below:

	Three Months Ended March 31, 2025
(in thousands)	Beginning Balance		Provision Charged to Expense			Losses Charged Off		Recoveries		Ending Balance
ACL for unfunded commitments:
Commercial	$	1,071	$	124		$	0	$	0	$	1,195
Real estate mortgage		372		(45	)		0		0		327
Consumer		22		1			0		0		23
Total unfunded commitment off-balance sheet credit exposure	$	1,465	$	80		$	0	$	0	$	1,545

	Three Months Ended March 31, 2024
(in thousands)	Beginning Balance		Provision Charged to Expense		Losses Charged Off		Recoveries		Ending Balance
ACL for unfunded commitments:
Commercial	$	1,071	$	0	$	0	$	0	$	1,071
Real estate mortgage		372		0		0		0		372
Consumer		22		0		0		0		22
Total unfunded commitment off-balance sheet credit exposure	$	1,465	$	0	$	0	$	0	$	1,465

Note 5 – Repurchase Agreements

We utilize securities sold under agreements to repurchase to facilitate the needs of our customers and provide additional funding to our balance sheet. Repurchase agreements are transactions whereby we offer to sell to a counterparty an undivided interest in an eligible security at an agreed upon purchase price, and which obligates CTBI to repurchase the security on an agreed upon date at an agreed upon repurchase price plus interest at an agreed upon rate. Securities sold under agreements to repurchase are recorded at the amount of cash received in connection with the transaction and are reflected in the accompanying consolidated balance sheets.

We monitor collateral levels on a continuous basis and maintain records of each transaction specifically describing the applicable security and the counterparty’s fractional interest in that security, and we segregate the security from its general assets in accordance with regulations governing custodial holdings of securities. The primary risk with our repurchase agreements is market risk associated with the securities securing the transactions, as we may be required to provide additional collateral based on fair value changes of the underlying securities. Securities pledged as collateral under repurchase agreements are maintained with our safekeeping agents. The carrying value of investment securities available-for-sale pledged as collateral under repurchase agreements totaled $299.9 million and $292.2 million at March 31, 2025 and December 31, 2024, respectively.

The remaining contractual maturity of the securities sold under agreements to repurchase by class of collateral pledged included in the accompanying consolidated balance sheets as of March 31, 2025 and December 31, 2024 is presented in the following tables:

	March 31, 2025
	Remaining Contractual Maturity of the Agreements
(in thousands)	Overnight and Continuous		Up to 30 days		30-90 days		Greater Than 90 days		Total
Repurchase agreements and repurchase-to-maturity transactions:
U.S. Treasury and government agencies	$	17,546	$	0	$	0	$	4,473	$	22,019
State and political subdivisions		114,378		0		0		13,088		127,466
Agency mortgage-backed securities		24,266		0		22,000		39,556		85,822
Asset-backed securities		4,268		0		0		6,981		11,249
Total repurchase agreements	$	160,458	$	0	$	22,000	$	64,098	$	246,556

	December 31, 2024
	Remaining Contractual Maturity of the Agreements
(in thousands)	Overnight and Continuous		Up to 30 days		30-90 days		Greater Than 90 days		Total
Repurchase agreements and repurchase-to-maturity transactions:
U.S. Treasury and government agencies	$	23,240	$	11	$	7,657	$	25,482	$	56,390
State and political subdivisions		108,775		489		7,288		3,700		120,252
Agency mortgage-backed securities		17,756		0		34,355		7,091		59,202
Asset-backed securities		4,322		0		0		0		4,322
Total repurchase agreements	$	154,093	$	500	$	49,300	$	36,273	$	240,166

Repurchase agreements are subject to underlying agreements with master netting or similar arrangements, which provide for the right of setoff in the event of default or in the event of bankruptcy of either party to the transactions. Repurchase agreements are reported to these arrangements on a gross basis. The following table presents information regarding repurchase agreements as if it was presented on a net basis as of March 31, 2025 and December 31, 2024:

							Gross Amount Not Offset in the Balance Sheet
(in thousands)	Gross Amount of Recognized Liabilities		Gross Amount Offset in the Balance Sheet		Net Amount of Liabilities Presented in the Balance Sheet		Financial Instruments Posted as Collateral			Cash Posted as Collateral		Net Amount
March 31, 2025:
Repurchase agreements	$	246,556	$	0	$	246,556	$	(246,556	)	$	0	$	0

December 31, 2024:
Repurchase agreements	$	240,166	$	0	$	240,166	$	(240,166	)	$	0	$	0

Amounts disclosed for collateral received or posted include cash and securities up to and not exceeding the net amount of the repurchase agreement liability presented in the balance sheet. The fair value of the total collateral may exceed the amounts presented. Refer to Note 3 for the total fair value of financial instruments pledged as collateral for repurchase agreements.

Note 6 – Fair Value of Financial Assets and Liabilities

Fair Value Measurements

ASC 820, Fair Value Measurements, defines fair value, establishes a framework for measuring fair value in GAAP and expands disclosures about fair value measurements. ASC 820 applies whenever other standards require (or permit) assets or liabilities to be measured at fair value but does not expand the use of fair value in any new circumstances. Fair value measurements must maximize the use of observable inputs and minimize the use of unobservable inputs. In this standard, the FASB clarifies the principle that fair value should be based on the exit price when pricing the asset or liability. In support of this principle, ASC 820 establishes a fair value hierarchy that prioritizes the information used to develop those assumptions. The fair value hierarchy is as follows:

Level 1 Inputs – Quoted prices in active markets for identical assets or liabilities.

Level 2 Inputs – Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. These might include quoted prices for similar assets and liabilities in active markets, and inputs other than quoted prices that are observable for the asset or liability, such as interest rates and yield curves that are observable at commonly quoted intervals.

Level 3 Inputs – Unobservable inputs for determining the fair values of assets or liabilities that reflect an entity’s own assumptions about the assumptions that market participants would use in determining an exit price for the assets or liabilities.

A financial instrument’s categorization within the above valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. CTBI’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and CTBI considers factors specific to the assets or liabilities. The following is a description of the valuation methodologies used for CTBI’s assets and liabilities measured at fair value on a recurring basis.

Recurring Measurements

The following tables present the fair value measurements of assets recognized in the accompanying balance sheets measured at fair value on a recurring basis as of March 31, 2025 and December 31, 2024 and indicate the level within the fair value hierarchy of the valuation techniques.

			Fair Value Measurements at March 31, 2025 Using
(in thousands)	Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets measured – recurring basis
Available-for-sale securities:
U.S. Treasury and government agencies	$	246,254	$	234,290	$	11,964	$	0
State and political subdivisions		257,105		0		257,105		0
Agency mortgage-backed securities		455,542		0		455,542		0
Asset-backed securities		49,651		0		49,651		0
Equity securities at fair value		4,261		0		0		4,261
Mortgage servicing rights		7,093		0		0		7,093

			Fair Value Measurements at December 31, 2024 Using
(in thousands)	Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets measured – recurring basis
Available-for-sale securities:
U.S. Treasury and government agencies	$	341,495	$	328,569	$	12,926	$	0
State and political subdivisions		253,557		0		253,557		0
Agency mortgage-backed securities		409,709		0		409,709		0
Asset-backed securities		50,967		0		50,967		0
Equity securities at fair value		3,781		0		0		3,781
Mortgage servicing rights		7,357		0		0		7,357

Following is a description of the valuation methodologies and inputs used for assets measured at fair value on a recurring basis and recognized in the accompanying balance sheets, as well as the general classification of such assets pursuant to the valuation hierarchy. These valuation methodologies were applied to all of CTBI’s financial assets carried at fair value. CTBI had no liabilities measured and recorded at fair value as of March 31, 2025 and December 31, 2024. There have been no significant changes in the valuation techniques during the quarter ended March 31, 2025. For assets classified within Level 3 of the fair value hierarchy, the process used to develop the reported fair value is described below.

Uncertainty of Fair Value Measurements

The following is a discussion of the uncertainty of fair value measurements, the interrelationships between those inputs and other unobservable inputs used in recurring fair value measurement, and how those inputs might magnify or mitigate the effect of changes in the unobservable inputs on the fair value measurement.

Available-for-Sale Securities

Securities classified as AFS are reported at fair value on a recurring basis. U.S. Treasury and government agencies are classified as Level 1 of the valuation hierarchy where quoted market prices are available in the active market on which the individual securities are traded.

If quoted market prices are not available, CTBI obtains fair value measurements from an independent pricing service, such as Interactive Data, which utilizes pricing models to determine fair value measurement. CTBI reviews the pricing quarterly to verify the reasonableness of the pricing. The fair value measurements consider observable data that may include dealer quotes, market spreads, cash flows, the U.S. Treasury yield curve, live trading levels, trade execution data, market consensus prepayment speeds, credit information, and the bond’s terms and conditions, among other factors. U.S. Treasury and government agencies, state and political subdivisions, agency mortgage-backed securities, and asset-backed securities are classified as Level 2 inputs.

In certain cases where Level 1 or Level 2 inputs are not available, securities are classified within Level 3 of the hierarchy. Fair value determinations for Level 3 measurements are estimated on a quarterly basis where assumptions used are reviewed to ensure the estimated fair value complies with accounting standards generally accepted in the United States.

Equity Securities at Fair Value

As of March 31, 2025 and December 31, 2024, the only securities owned by CTBI that were valued using Level 3 criteria are Visa Class B Stock (included in equity securities at fair value). Fair value for Visa Class B Stock is determined by utilizing assumptions about factors such as quarterly common stock dividend payments, the conversion of the securities to the relevant Class A Stock shares subject to the prevailing conversion rate and conversion date. We have concluded the assumptions, processes, and conclusions to be reasonable and appropriate in determining the fair value of this asset. See the tables below for inputs and valuation techniques used for Level 3 equity securities.

Fair value for equity securities is derived based on unobservable inputs, such as the discount rate, quarterly dividends payable to the Visa Class B common stock, and the prevailing conversion rate at the conversion date. The most recent conversion rate of 1.5609 and the most recent dividend rate of 0.9209 were used to derive the fair value estimate. Significant increases (decreases) in either of those inputs in isolation would result in a significantly lower (higher) fair value measurement. Generally, a change in the assumption used for discount rate is accompanied by a directionally opposite change in the fair value estimate. The weighted averages presented in the tables below are determined by taking the median of the estimates in conversion dates and discount rate.

Mortgage Servicing Rights

Mortgage servicing rights (“MSRs”) do not trade in an active, open market with readily observable prices. CTBI reports MSRs at fair value on a recurring basis with subsequent remeasurement of MSRs based on change in fair value.

In determining fair value, CTBI utilizes assumptions about factors such as mortgage interest rates, discount rates, mortgage loan prepayment speeds, market trends, and industry demand. Due to the nature of the valuation inputs, MSRs are classified within Level 3 of the hierarchy. We have determined these assumptions, processes, and conclusions to be reasonable and appropriate in determining the fair value of this asset. See the table below for inputs and valuation techniques used for Level 3 MSRs.

Fair value for MSRs is derived based on unobservable inputs, such as prepayment speeds of the underlying loans generated using the Andrew Davidson Prepayment Model, FHLMC/FNMA guidelines, the weighted average life of the loan, the discount rate, the weighted average coupon, and the weighted average default rate. Significant increases (decreases) in either of those inputs in isolation would result in a significantly lower (higher) fair value measurement. Generally, a change in the assumption used for prepayment speeds is accompanied by a directionally opposite change in the assumption for interest rates.

Level 3 Reconciliation

Following is a reconciliation of the beginning and ending balances of recurring fair value measurements, for the periods indicated, using significant unobservable (Level 3) inputs:

	Three Months Ended March 31, 2025					Three Months Ended March 31, 2024
(in thousands)	Equity Securities at Fair Value		Mortgage Servicing Rights			Equity Securities at Fair Value		Mortgage Servicing Rights
Beginning balance	$	3,781	$	7,357		$	3,158	$	7,665
Total unrealized gains (losses)
Included in net income		480		(113	)		371		276
Issues		0		20			0		19
Settlements		0		(171	)		0		(168	)
Ending balance	$	4,261	$	7,093		$	3,529	$	7,792

Total gains (losses) for the period included in net income attributable to the change in unrealized gains or losses related to assets still held at the reporting date	$	480	$	(113	)	$	371	$	276

Realized and unrealized gains and losses for items reflected in the tables above are included in net income in the consolidated statements of income as follows:

Noninterest Income

	Three Months Ended
	March 31
(in thousands)	2025		2024
Total gains	$	196	$	479

Nonrecurring Measurements

The following tables present the fair value measurements of assets recognized in the accompanying balance sheets measured at fair value on a nonrecurring basis as of March 31, 2025 and December 31, 2024 and indicate the level within the fair value hierarchy of the valuation techniques.

			Fair Value Measurements at March 31, 2025 Using
(in thousands)	Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets measured – nonrecurring basis
Collateral dependent loans	$	0	$	0	$	0	$	0
Other real estate owned		0		0		0		0

			Fair Value Measurements at December 31, 2024 Using
(in thousands)	Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets measured – nonrecurring basis
Collateral dependent loans	$	8,310	$	0	$	0	$	8,310
Other real estate owned		731		0		0		731

Following is a description of the valuation methodologies and inputs used for assets measured at fair value on a nonrecurring basis and recognized in the accompanying balance sheet, as well as the general classification of such assets pursuant to the valuation hierarchy. For assets classified within Level 3 of the fair value hierarchy, the process used to develop the reported fair value is described below.

Collateral Dependent Loans

The estimated fair value of collateral-dependent loans is based on the appraised fair value of the collateral, less estimated cost to sell. Collateral-dependent loans are classified within Level 3 of the fair value hierarchy.

CTBI considers the appraisal or evaluation as the starting point for determining fair value and then considers other factors and events in the environment that may affect the fair value. Appraisals of the collateral underlying collateral-dependent loans are obtained when the loan is determined to be collateral-dependent and subsequently as deemed necessary by the Chief Credit Officer. Appraisals are reviewed for accuracy and consistency by the Chief Credit Officer. Appraisers are selected from the list of approved appraisers maintained by management. The appraised values are reduced by discounts to consider lack of marketability and estimated cost to sell if repayment or satisfaction of the loan is dependent on the sale of the collateral. These discounts and estimates are developed by the Chief Credit Officer by comparison to historical results.

Loans considered collateral-dependent are loans for which the repayment is expected to be provided substantially through the operation or sale of the collateral when the borrower is experiencing financial difficulty. There were no fair value adjustments on collateral-dependent loans for the quarters ended March 31, 2025 and December 31, 2024, while losses for the quarter ended March 31, 2024 were $0.1 million.

Other Real Estate Owned

Estimated fair value of other real estate owned (“OREO”) is based on appraisals or evaluations. OREO is classified within Level 3 of the fair value hierarchy. Long-lived assets are subject to nonrecurring fair value adjustments to reflect subsequent partial write-downs that are based on the observable market price or current appraised value of the collateral. There were no fair value adjustments for the quarters ended March 31, 2025 and March 31, 2024 on OREO disclosed above, while losses for the quarter ended December 31, 2024 were $0.1 million.

Our policy for determining the frequency of periodic reviews is based upon consideration of the specific properties and the known or perceived market fluctuations in a particular market and is typically between 12 and 18 months but generally not more than 24 months. Appraisers are selected from the list of approved appraisers maintained by management.

Unobservable (Level 3) Inputs

Unobservable inputs for mortgage servicing rights were weighted by loan amount. Unobservable inputs for equity securities were weighted by security value. The following tables present quantitative information about unobservable inputs used in recurring and nonrecurring Level 3 fair value measurements at March 31, 2025 and December 31, 2024.

	Quantitative Information about Level 3 Fair Value Measurements
(in thousands)	Fair Value at March 31, 2025		Valuation Technique(s)	Unobservable Input	Range (Weighted Average)
Equity securities at fair value	$	4,261	Discount cash flows, computer pricing model	Discount rate		8.0% - 12.0% (10%)
				Conversion date	Dec 2025 - Dec 2029 (Dec 2027)

Mortgage servicing rights	$	7,093	Discount cash flows, computer pricing model	Constant prepayment rate		6.3% - 8.4% (6.7%)
				Cost to service		$0 - $817 ($76)
				Probability of default		0.0% - 35.3% (1.5%)
				Discount rate		10.0% - 11.0% (10.1%)

	Quantitative Information about Level 3 Fair Value Measurements
(in thousands)	Fair Value at December 31, 2024		Valuation Technique(s)	Unobservable Input	Range (Weighted Average)
Equity securities at fair value	$	3,781	Discount cash flows, computer pricing model	Discount rate		8.0% - 12.0% (10.0%)
				Conversion date	Dec 2025 - Dec 2029 (Dec 2027)

Mortgage servicing rights	$	7,357	Discount cash flows, computer pricing model	Constant prepayment rate		0.0% - 21.2% (6.6%)
				Cost to service		$0 - $435 ($76)
				Probability of default		0.0% - 100.0% (1.7%)
				Discount rate		9.5% - 12.3% (10.1%)

Collateral-dependent loans	$	8,310	Market comparable properties	Marketability discount		11.5% - 18.9% (12.6%)

Other real estate owned	$	731	Market comparable properties	Comparability adjustments		10.0% - 58.53% (42.2%)

Fair Value of Financial Instruments

The following table presents estimated fair value of CTBI’s financial instruments as of March 31, 2025 and indicates the level within the fair value hierarchy of the valuation techniques. In accordance with the adoption of ASU 2016-01, the fair values as of March 31, 2025 were measured using an exit price notion.

			Fair Value Measurements at March 31, 2025 Using
(in thousands)	Carrying Amount		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Financial assets:
Cash and cash equivalents	$	340,665	$	340,665	$	0	$	0
Certificates of deposit in other banks		245		0		245		0
Debt securities available-for-sale		1,008,552		234,290		774,262		0
Equity securities at fair value		4,261		0		0		4,261
Loans held for sale		0		0		0		0
Loans, net		4,579,575		0		0		4,462,657
Federal Home Loan Bank stock		4,886		0		4,886		0
Federal Reserve Bank stock		4,887		0		4,887		0
Accrued interest receivable		24,032		0		24,032		0

Financial liabilities:
Deposits	$	5,111,305	$	1,235,544	$	3,688,100	$	0
Repurchase agreements		246,556		0		0		246,711
Federal funds purchased		500		0		500		0
Advances from Federal Home Loan Bank		309		0		326		0
Long-term debt		63,958		0		0		56,434
Accrued interest payable		10,899		0		10,899		0

Unrecognized financial instruments:
Letters of credit	$	0	$	0	$	0	$	0
Commitments to extend credit		0		0		0		0
Forward sale commitments		0		0		0		0

The following table presents estimated fair value of CTBI’s financial instruments as of December 31, 2024 and indicates the level within the fair value hierarchy of the valuation techniques.

			Fair Value Measurements at December 31, 2024 Using
(in thousands)	Carrying Amount		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Financial assets:
Cash and cash equivalents	$	369,505	$	369,505	$	0	$	0
Certificates of deposit in other banks		245		0		245		0
Debt securities available-for-sale		1,055,728		328,569		727,159		0
Equity securities at fair value		3,781		0		0		3,781
Loans held for sale		184		188		0		0
Loans, net		4,431,669		0		0		4,166,636
Federal Home Loan Bank stock		5,062		0		5,062		0
Federal Reserve Bank stock		4,887		0		4,887		0
Accrued interest receivable		24,758		0		24,758		0

Financial liabilities:
Deposits	$	5,070,189	$	1,242,676	$	3,598,253	$	0
Repurchase agreements		240,166		0		0		240,213
Federal funds purchased		500		0		500		0
Advances from Federal Home Loan Bank		314		0		322		0
Long-term debt		64,016		0		0		52,394
Accrued interest payable		8,378		0		8,378		0

Unrecognized financial instruments:
Letters of credit	$	0	$	0	$	0	$	0
Commitments to extend credit		0		0		0		0
Forward sale commitments		0		0		0		0

Note 7 – Segment Reporting

CTBI is a financial holding company, whose principal activity is the ownership and management of its wholly-owned subsidiaries, including CTB and Community Trust and Investment Company. As a community-oriented financial institution, the majority of CTBI’s operations consist of commercial and personal banking services. Management analyzes the operation of CTBI assuming one operating segment, community banking services. CTBI, through our operating subsidiaries, offers a wide range of consumer and commercial community banking services. Our chief operating decision maker is comprised of the executive officers of CTBI (the “Executive Committee”). The Executive Committee uses net income to allocate resources in the annual budget and forecasting process. The Executive Committee considers budget-to-actual variances on a monthly basis for profit measures when making decisions about allocating capital and personnel to the operating segment. The Executive Committee uses net interest income and noninterest income to allocate resources (including employees, financial, or capital resources) to that segment in the annual budget and forecasting process and uses that measure as a basis for evaluating product offerings and pricing. The following tables present information about reported segment revenue, measures of a segment’s profit or loss, and significant segment expenses for the quarters ended March 31, 2025 and 2024, and measure of a segment’s assets as of March 31, 2025 and December 31, 2024. CTBI does not allocate all holding company expenses, income taxes, or unusual items to the reportable segment. Accounting policies for the segment are the same as described in Note 1 above. All operations of CTBI are domestic. The following tables present the reconciliations of reportable segment revenues and measures of profit or loss and line item reconciliation to CTBI’s consolidated financial statement totals for the periods indicated.

(in thousands) Three Months Ended March 31, 2025	Community Banking Services		Holding Company			Eliminations			Consolidated
Interest income:
Interest and fees on loans, including loans held for sale	$	72,736	$	0		$	0		$	72,736
Interest and dividends on securities:
Taxable		5,775		0			0			5,775
Tax exempt		617		0			0			617
Interest and dividends on Federal Reserve Bank and Federal Home Loan Bank stock		188		0			0			188
Interest on Federal Reserve Bank deposits		2,648		0			0			2,648
Other, including interest on federal funds sold		61		29			0			90
Total interest income		82,025		29			0			82,054

Interest expense:
Interest on deposits		27,458		0			0			27,458
Interest on repurchase agreements and federal funds purchased		2,318		0			0			2,318
Interest on long-term debt		92		975			(56	)		1,011
Total interest expense		29,868		975			(56	)		30,787

Net interest income		52,157		(946	)		56			51,267
Provision for credit losses		3,568		0			0			3,568
Net interest income after provision for credit losses		48,589		(946	)		56			47,699

Noninterest income:
Deposit related fees		6,822		0			0			6,822
Gains on sales of loans, net		47		0			0			47
Trust and wealth management income		4,119		0			(138	)		3,981
Loan related fees		965		0			0			965
Bank owned life insurance		1,035		0			0			1,035
Brokerage revenue		494		0			0			494
Securities gains		480		0			0			480
Dividend and undistributed income from subsidiaries		0		23,469			(23,469	)		0
Other noninterest income		1,370		309			(606	)		1,073
Total noninterest income		15,332		23,778			(24,213	)		14,897

Noninterest expense:
Officer salaries and employee benefits		3,805		813			(221	)		4,397
Other salaries and employee benefits		15,721		230			(230	)		15,721
Occupancy, net		2,751		0			0			2,751
Equipment		706		51			(68	)		689
Data processing		3,297		6			(444	)		2,859
Tax other than property and payroll		529		0			0			529
Legal fees		493		67			0			560
Professional fees		1,346		101			(782	)		665
Advertising and marketing		665		8			0			673
FDIC insurance		689		0			0			689
Other real estate owned provision and expense		61		0			0			61
Repossession expense		193		0			0			193
Other noninterest expense		4,315		256			(150	)		4,421
Total noninterest expense		34,571		1,532			(1,895	)		34,208

Income before income taxes		29,350		21,300			(22,262	)		28,388
Income taxes		7,088		(672	)		0			6,416
Net income	$	22,262	$	21,972		$	(22,262	)	$	21,972

(in thousands) Three Months Ended March 31, 2024	Community Banking Services		Holding Company			Eliminations			Consolidated
Interest income:
Interest and fees on loans, including loans held for sale	$	64,716	$	0		$	0		$	64,716
Interest and dividends on securities:
Taxable		6,730		0			0			6,730
Tax exempt		659		0			0			659
Interest and dividends on Federal Reserve Bank and Federal Home Loan Bank stock		209		0			0			209
Interest on Federal Reserve Bank deposits		2,591		0			0			2,591
Other, including interest on federal funds sold		64		33			0			97
Total interest income		74,969		33			0			75,002

Interest expense:
Interest on deposits		27,676		0			0			27,676
Interest on repurchase agreements and federal funds purchased		2,575		0			0			2,575
Interest on long-term debt		94		1,131			(65	)		1,160
Total interest expense		30,345		1,131			(65	)		31,411

Net interest income		44,624		(1,098	)		65			43,591
Provision for credit losses		2,656		0			0			2,656
Net interest income after provision for credit losses		41,968		(1,098	)		65			40,935

Noninterest income:
Deposit related fees		7,011		0			0			7,011
Gains on sales of loans, net		45		0			0			45
Trust and wealth management income		3,536		0			(19	)		3,517
Loan related fees		1,352		0			0			1,352
Bank owned life insurance		1,292		0			0			1,292
Brokerage revenue		490		0			0			490
Securities gains		371		0			0			371
Dividend and undistributed income from subsidiaries		0		20,196			(20,196	)		0
Other noninterest income		1,336		288			(568	)		1,056
Total noninterest income		15,433		20,484			(20,783	)		15,134

Noninterest expense:
Officer salaries and employee benefits		3,834		615			(208	)		4,241
Other salaries and employee benefits		15,881		218			(218	)		15,881
Occupancy, net		2,378		0			0			2,378
Equipment		661		47			(58	)		650
Data processing		2,896		4			(382	)		2,518
Taxes other than property and payroll		442		0			0			442
Legal fees		178		40			0			218
Professional fees		1,443		92			(921	)		614
Advertising and marketing		571		6			0			577
FDIC insurance		642		0			0			642
Other real estate owned provision and expense		40		0			0			40
Repossession expense		226		0			0			226
Other noninterest expense		3,669		268			(144	)		3,793
Total noninterest expense		32,861		1,290			(1,931	)		32,220

Income before income taxes		24,540		18,096			(18,787	)		23,849
Income taxes		5,753		(583	)		0			5,170
Net income	$	18,787	$	18,679		$	(18,787	)	$	18,679

The following tables present other segment disclosures for the periods indicated:

(in thousands) Three Months Ended March 31, 2025	Community Banking Services		Holding Company		Eliminations		Consolidated
Depreciation and amortization	$	906	$	51	$	0	$	957
Amortization of operating lease right-of-use assets		439		0		0		439
Significant non-cash items:
Provision for credit losses		3,568		0		0		3,568
Change in cash surrender value of bank owned life insurance		701		0		0		701
Expenditures for long-lived assets		2,011		66		0		2,077

(in thousands) Three Months Ended March 31, 2024	Community Banking Services		Holding Company		Eliminations		Consolidated
Depreciation and amortization	$	879	$	47	$	0	$	926
Amortization of operating lease right-of-use assets		174		0		0		174
Significant non-cash items:
Provision for credit losses		2,656		0		0		2,656
Change in cash surrender value of bank owned life insurance		983		0		0		983
Expenditures for long-lived assets		1,951		230		0		2,181

Below is a reconciliation of our reportable segment assets to CTBI’s consolidated total assets as of March 31, 2025 and December 31, 2024:

(in thousands)	March 31 2025			December 31 2024
Assets
Community banking services assets	$	6,268,705		$	6,186,518
Holding company assets		848,173			822,851
Elimination of subsidiary and parent cash and intercompany receivables		(2,626	)		(3,779	)
Elimination of investment in subsidiaries		(837,734	)		(812,345	)
Consolidated total assets	$	6,276,518		$	6,193,245

Note 8 – Revenue Recognition

CTBI’s primary source of revenue is interest income generated from loans and investment securities. Interest income is recognized according to the terms of the financial instrument agreement over the life of the loan or investment security unless it is determined that the counterparty is unable to continue making interest payments. Interest income also includes prepaid interest fees from commercial customers, which approximates the interest foregone on the balance of the loan prepaid.

CTBI’s additional source of income, also referred to as noninterest income, includes service charges on deposit accounts, gains on sales of loans, trust and wealth management income, loan related fees, brokerage revenue, and other miscellaneous income and is largely based on contracts with customers. In these cases, CTBI recognizes revenue when it satisfies a performance obligation by transferring control over a product or service to a customer. CTBI considers a customer to be any party to which we will provide goods or services that are an output of CTBI’s ordinary activities in exchange for consideration. There is little seasonality with regards to revenue from contracts with customers and all inter-company revenue is eliminated when CTBI’s financial statements are consolidated.

Generally, CTBI enters into contracts with customers that are short-term in nature where the performance obligations are fulfilled and payment is processed at the same time. Such examples include revenue related to merchant fees, interchange fees, and investment services income. In addition, revenue generated from existing customer relationships such as deposit accounts are also considered short-term in nature, because the relationship may be terminated at any time and payment is processed at the time performance obligations are fulfilled. As a result, CTBI does not have contract assets, contract liabilities, or related receivable accounts for contracts with customers. In cases where collectability is a concern, CTBI does not record revenue.

Generally, the pricing of transactions between CTBI and each customer is either (i) established within a legally enforceable contract between the two parties, as is the case with loan sales, or (ii) disclosed to the customer at a specific point in time, as is the case when a deposit account is opened or before a new loan is underwritten. Fees are usually fixed at a specific amount or as a percentage of a transaction amount. No judgment or estimates by management are required to record revenue related to these transactions and pricing is clearly identified within these contracts.

CTBI primarily operates in Kentucky and contiguous areas. Therefore, all significant operating decisions are based upon analysis of CTBI as one operating segment.

We disaggregate our revenue from contracts with customers by contract-type and timing of revenue recognition, as we believe it best depicts how the nature, amount, timing, and uncertainty of our revenue and cash flows are affected by economic factors. Noninterest income not generated from customers during CTBI’s ordinary activities primarily relates to MSRs, gains/losses on the sale of investment securities, gains/losses on the sale of OREO, gains/losses on the sale of property, plant and equipment, and income from bank owned life insurance.

Note 9 – Earnings Per Share

The following table sets forth the computation of basic and diluted earnings per share for the three months ended March 31, 2025 and 2024:

	Three Months Ended
	March 31
(in thousands except per share data)	2025		2024
Numerator:
Net income	$	21,972	$	18,679

Denominator:
Basic earnings per share:
Weighted average shares		17,995		17,926
Diluted earnings per share:
Dilutive effect of equity grants		27		17
Adjusted weighted average shares		18,022		17,943

Earnings per share:
Basic earnings per share	$	1.22	$	1.04
Diluted earnings per share		1.22		1.04

There were no options to purchase common shares that were excluded from the diluted calculations above for the three months ended March 31, 2025 and 2024. In addition to in-the-money stock options, unvested restricted stock grants were also used in the calculation of diluted earnings per share based on the treasury method.

Note 10 – Accumulated Other Comprehensive Income (Loss)

The following table shows the reconciliation of accumulated other comprehensive income (loss) for the quarters ended March 31, 2025 and 2024. There were no amounts reclassified to earnings during these periods.

	Three Months Ended March 31
(in thousands)	2025			2024
Beginning balance	$	(98,369	)	$	(103,321	)

Unrealized holding gains (losses) on debt securities AFS		16,395			(4,725	)
Tax expense (benefit)		4,091			(1,179	)
Unrealized holding gains (losses) on debt securities AFS, net of tax		12,304			(3,546	)

Ending balance	$	(86,065	)	$	(106,867	)

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Overview

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is intended to help the reader understand Community Trust Bancorp, Inc. (“CTBI”), our operations, and our present business environment. The MD&A is provided as a supplement to—and should be read in conjunction with—our condensed consolidated financial statements and the accompanying notes thereto contained in Part I, Item 1 of this quarterly report, as well as our consolidated financial statements, the accompanying notes thereto, and the related 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, 2024.

Our Business

Community Trust Bancorp, Inc. (“CTBI”) is a bank holding company headquartered in Pikeville, Kentucky. Currently, we own one commercial bank, Community Trust Bank, Inc. (“CTB”) and one trust company, Community Trust and Investment Company. Through our subsidiaries, we have eighty-one banking locations in eastern, northeastern, central, and south central Kentucky, southern West Virginia, and northeastern Tennessee, four trust offices across Kentucky, and one trust office in northeastern Tennessee. At March 31, 2025, we had total consolidated assets of $6.3 billion and total consolidated deposits, including repurchase agreements, of $5.4 billion. Total shareholders’ equity at March 31, 2025 was $784.2 million. Trust assets under management at March 31, 2025 were $3.6 billion, including CTB’s investment portfolio totaling $1.0 billion.

Through our subsidiaries, CTBI engages in a wide range of 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 lending activities of CTB include making commercial, construction, mortgage, and personal loans. Lines of credit, revolving lines of credit, term loans, and other specialized loans, including asset-based financing, are also available. Our corporate subsidiaries act as trustees of personal trusts, as executors of estates, as trustees for employee benefit trusts, as paying agents for bond and stock issues, as investment agent, as depositories for securities, and as providers of full-service brokerage, and insurance services. For further information, see Item 1 of our annual report on Form 10-K for the year ended December 31, 2024.

Results of Operations and Financial Condition

We reported earnings for the first quarter of 2025 of $22.0 million, or $1.22 per basic share, compared to $22.5 million, or $1.25 per basic share, earned during the fourth quarter of 2024 and $18.7 million, or $1.04 per basic share, earned during the first quarter of 2024. Total revenue for the quarter was $0.5 million above prior quarter and $7.4 million above prior year same quarter. Net interest revenue for the quarter increased $1.7 million compared to prior quarter and $7.7 million compared to prior year same quarter, and noninterest income decreased $1.3 million compared to prior quarter and $0.2 million compared to prior year same quarter. Our provision for credit losses for the quarter increased $1.0 million from prior quarter and $0.9 million from prior year same quarter. Noninterest expense increased $0.4 million compared to prior quarter and $2.0 million compared to prior year same quarter.

Quarterly Highlights

❖	Net interest income for the quarter of $51.3 million was $1.7 million, or 3.5%, above prior quarter and $7.7 million, or 17.6%, above prior year same quarter, as our net interest margin increased 14 basis points from prior quarter and 34 basis points from prior year same quarter.

❖	Provision for credit losses at $3.6 million for the quarter increased $1.0 million from prior quarter and $0.9 million from prior year same quarter.

❖	Noninterest income for the quarter ended March 31, 2025 of $14.9 million was $1.3 million, or 7.8%, below prior quarter and $0.2 million, or 1.6%, below prior year same quarter.

❖	Noninterest expense for the quarter ended March 31, 2025 of $34.2 million was $0.4 million, or 1.3%, above prior quarter and $2.0 million, or 6.2%, above prior year same quarter.

❖	Our loan portfolio at $4.6 billion increased $149.9 million, an annualized 13.5%, from December 31, 2024 and $475.4 million, or 11.4%, from March 31, 2024.

❖

We had net loan charge-offs of $1.6 million, or an annualized 0.14% of average loans, for the first quarter of 2025 compared to $1.0 million, or an annualized 0.09% of average loans, for the fourth quarter of 2024 and $1.6 million, or 0.16% of average loans annualized, for the first quarter of 2024.

❖

Our total nonperforming loans decreased to $26.5 million at March 31, 2025 from $26.7 million at December 31, 2024 but increased $10.7 million from the $15.9 million at March 31, 2024. Nonperforming assets at $31.3 million increased $1.0 million from December 31, 2024 and $14.2 million from March 31, 2024.

❖	Deposits, including repurchase agreements, at $5.4 billion increased $47.5 million, or an annualized 3.6%, from December 31, 2024 and $338.9 million, or 6.8%, from March 31, 2024.

❖	Shareholders’ equity at $784.2 million increased $26.6 million, or an annualized 14.2%, during the quarter and $76.4 million, or 10.8%, from March 31, 2024.

Income Statement Review

							Change Q-O-Q
(dollars in thousands)	1Q 2025			1Q 2024			Amount			Percent
Net interest income	$	51,267		$	43,591		$	7,676			17.6	%
Provision for credit losses		3,568			2,656			912			34.3
Noninterest income		14,897			15,134			(237	)		(1.6	)
Noninterest expense		34,208			32,220			1,988			6.2
Income taxes		6,416			5,170			1,246			24.1
Net income	$	21,972		$	18,679		$	3,293			17.6	%

Average earning assets	$	5,848,092		$	5,458,075		$	390,017			7.1	%

Yield on average earnings assets, tax equivalent*		5.71	%		5.55	%		0.16	%		2.9	%
Cost of interest bearing funds		3.02	%		3.35	%		(0.33	)%		(9.9	)%

Net interest margin, tax equivalent*		3.57	%		3.23	%		0.34	%		10.5	%

*Yield on average earning assets and net interest margin are computed on a taxable equivalent basis using a 24.95% tax rate.

Consolidated Average Balance Sheets and Taxable Equivalent Income/Expense and Yields/Rates

		Three Months Ended							Three Months Ended
	March 31, 2025								March 31, 2024
(in thousands)	Average Balances			Interest		Average Rate			Average Balances			Interest		Average Rate
Earning assets:

Loans (1)(2)(3)	$	4,533,091		$	72,800		6.51	%	$	4,096,866		$	64,788		6.36	%
Loans held for sale		106			3		11.48			70			3		17.24
Securities:
U.S. Treasury and agencies		739,512			4,054		2.22			798,797			4,269		2.15
Tax exempt state and political subdivisions (3)		99,047			822		3.37			106,893			877		3.30
Other securities		211,179			1,721		3.31			245,495			2,461		4.03
Federal Reserve Bank and Federal Home Loan Bank stock		9,853			188		7.74			9,397			210		8.99
Federal funds sold		0			0		0.00			55			1		7.31
Interest bearing deposits		253,202			2,708		4.34			198,400			2,652		5.38
Other investments		245			1		1.66			245			1		1.64
Investment in unconsolidated subsidiaries		1,857			29		6.33			1,857			34		7.36
Total earning assets	$	5,848,092		$	82,326		5.71	%	$	5,458,075		$	75,296		5.55	%
Allowance for credit losses		(55,423	)							(50,144	)
Total earnings assets, net of allowance for credit losses		5,792,669								5,407,931
Nonearning assets:
Cash and due from banks		54,677								60,388
Premises and equipment and right of use assets, net		65,011								61,774
Other assets		264,032								256,422
Total assets	$	6,176,389							$	5,786,515

Interest bearing liabilities:
Deposits:
Savings and demand deposits	$	2,479,835		$	14,400		2.35	%	$	2,213,133		$	15,355		2.79	%
Time deposits		1,356,907			13,058		3.90			1,266,164			12,321		3.91
Repurchase agreements and federal funds purchased		233,970			2,318		4.02			226,234			2,575		4.58
Advances from Federal Home Loan Bank		311			0		0.00			331			0		0.00
Long-term debt		63,989			971		6.15			64,215			1,120		7.01
Finance lease liability		3,439			40		4.72			3,436			40		4.68
Total interest bearing liabilities	$	4,138,451		$	30,787		3.02	%	$	3,773,513		$	31,411		3.35	%

Noninterest bearing liabilities:
Demand deposits		1,206,681								1,251,789
Other liabilities		56,350								52,872
Total liabilities		5,401,482								5,078,174

Shareholders’ equity		774,907								708,341
Total liabilities and shareholders’ equity	$	6,176,389							$	5,786,515

Net interest income, tax equivalent				$	51,539							$	43,885
Less tax equivalent interest income					272								294
Net interest income				$	51,267							$	43,591
Net interest spread							2.69	%							2.20	%
Benefit of interest free funding							0.88								1.03
Net interest margin							3.57	%							3.23	%

(1) Interest includes fees on loans of $0.6 million and $0.5 million for the three months ended March 31, 2025 and March 31, 2024, respectively.

(2) Loan balances include deferred loan origination costs and principal balances on nonaccrual loans.

(3) Tax exempt income on securities and loans is reported on a fully taxable equivalent basis using a 24.95% rate.

Net Interest Differential

The following table illustrates the approximate effect of volume and rate changes on net interest differentials between the three months ended March 31, 2025 and March 31, 2024.

	Total Change Three Months Ended March 31			Change Due to
(in thousands)		2025/2024		Volume			Rate
Interest income:
Loans	$	8,012		$	114,728		$	(106,716	)
Loans held for sale		0			20			(20	)
U.S. Treasury and agencies		(215	)		(5,047	)		4,832
Tax exempt state and political subdivisions		(55	)		(1,034	)		979
Other securities		(740	)		(6,053	)		5,313
Federal Reserve Bank and Federal Home Loan Bank stock		(22	)		160			(182	)
Federal funds sold		(1	)		0			(1	)
Interest bearing deposits		56			10,590			(10,534	)
Other investments		0			0			0
Investment in unconsolidated subsidiaries		(5	)		0			(5	)
Total interest income		7,030			113,364			(106,334	)

Interest expense:
Savings and demand deposits		(955	)		28,130			(29,085	)
Time deposits		737			14,364			(13,627	)
Repurchase agreements and federal funds purchased		(257	)		1,398			(1,655	)
Advances from Federal Home Loan Bank		0			0			0
Long-term debt		(149	)		(65	)		(84	)
Finance lease liability		0			1			(1	)
Total interest expense		(624	)		43,828			(44,452	)

Net interest income	$	7,654		$	69,536		$	(61,882	)

For purposes of the above table, changes which are due to both rate and volume are allocated based on a percentage basis, using the absolute values of rate and volume variance as a basis for percentages. Income is stated at a fully taxable equivalent basis, using a 24.95% tax rate.

Net interest income for the quarter of $51.3 million was $1.7 million, or 3.5%, above prior quarter and $7.7 million, or 17.6%, above prior year same quarter. Our net interest margin, on a fully tax equivalent basis, at 3.57% increased 14 basis points from prior quarter and 34 basis points from prior year same quarter. Our quarterly average earning assets increased $68.7 million from prior quarter and $390.0 million from prior year same quarter. Our yield on average earning assets increased 5 basis points from prior quarter and 16 basis points from prior year same quarter, while our cost of funds decreased 16 basis points from prior quarter and 33 basis points from prior year same quarter. Our ratio of average loans to deposits, including repurchase agreements, was 85.9% for the quarter ended March 31, 2025 compared to 84.4% for the quarter ended December 31, 2024 and 82.7% for the quarter ended March 31, 2024.

Provision for Credit Losses

Our provision for credit losses at $3.6 million for the quarter increased $1.0 million from prior quarter and $0.9 million from prior year same quarter. Of the provision for the quarter, $2.0 million was allotted to fund loan growth, while the remainder was used to fund net losses. Our reserve coverage (allowance for credit losses to nonperforming loans) at March 31, 2025 was 214.7% compared to 206.0% at December 31, 2024 and 319.0% at March 31, 2024. Our credit loss reserve as a percentage of total loans outstanding at March 31, 2025 remained at 1.23% from December 31, 2024 compared to 1.22% at March 31, 2024.

Noninterest Income

							Percent Change
							1Q 2025 Compared to:
($ in thousands)	1Q 2025		4Q 2024		1Q 2024		4Q 2024			1Q 2024
Deposit related fees	$	6,822	$	7,619	$	7,011		(10.5	)%		(2.7	)%
Trust revenue		3,981		3,961		3,517		0.5			13.2
Gains on sales of loans		47		50		45		(5.2	)		5.9
Loan related fees		965		1,472		1,352		(34.4	)		(28.6	)
Bank owned life insurance revenue		1,035		915		1,292		13.1			(19.9	)
Brokerage revenue		494		536		490		(7.8	)		0.8
Other		1,553		1,607		1,427		(3.4	)		8.8
Total noninterest income	$	14,897	$	16,160	$	15,134		(7.8	)%		1.6	%

Noninterest income for the quarter ended March 31, 2025 of $14.9 million was $1.3 million, or 7.8%, below prior quarter and $0.2 million, or 1.6%, below prior year same quarter. The variance quarter over quarter was primarily the result of decreases in deposit related fees ($0.8 million) and loan related fees ($0.5 million). Year over year decreases in loan related fees ($0.4 million), bank owned life insurance revenue ($0.3 million), and deposit related fees ($0.2 million) were partially offset by increases in trust revenue ($0.5 million) and securities gains ($0.1 million). The decrease in loan related fees resulted primarily from the fluctuation in the fair market value of our mortgage servicing rights.

Noninterest Expense

							Percent Change
							1Q 2025 Compared to:
($ in thousands)	1Q 2025		4Q 2024		1Q 2024		4Q 2024			1Q 2024
Salaries	$	13,269	$	13,310	$	13,036		(0.3	)%		1.8	%
Employee benefits		6,849		6,883		7,086		(0.5	)		(3.3	)
Net occupancy and equipment		3,440		3,015		3,028		14.1			13.6
Data processing		2,859		3,181		2,518		(10.1	)		13.5
Legal and professional fees		1,225		1,039		832		18.0			47.2
Advertising and marketing		673		821		577		(18.0	)		16.6
Taxes other than property and payroll		529		436		442		21.3			19.7
Other		5,364		5,084		4,701		5.5			14.1
Total noninterest expense	$	34,208	$	33,769	$	32,220		1.3	%		6.2	%

Noninterest expense for the quarter ended March 31, 2025 of $34.2 million was $0.4 million, or 1.3%, above prior quarter and $2.0 million, or 6.2%, above prior year same quarter. The quarter over quarter increase primarily resulted from increases in net occupancy and equipment expense ($0.4 million) and legal and professional fees ($0.2 million), partially offset by a decrease in data processing expense ($0.3 million). The year over year increase was primarily due to increases in net occupancy and equipment expense ($0.4 million), data processing expense ($0.3 million), legal and professional fees ($0.4 million), operating losses ($0.3 million), and loan related expenses ($0.2 million).

Balance Sheet Review

CTBI’s total assets at $6.3 billion as of March 31, 2025 increased $83.3 million, or 5.5% annualized, from December 31, 2024 and $426.3 million, or 7.3%, from March 31, 2024. Loans outstanding at $4.6 billion increased $149.9 million, an annualized 13.5%, from December 31, 2024 and $475.4 million, or 11.4%, from March 31, 2024. The increase in loans from prior quarter included an $85.0 million increase in the commercial loan portfolio, a $28.8 million increase in the residential loan portfolio, and a $38.3 million increase in the indirect consumer loan portfolio, partially offset by a $2.2 million decrease in the consumer direct loan portfolio. CTBI’s investment portfolio decreased $46.7 million, or an annualized 17.9%, from December 31, 2024 and $102.2 million, or 9.2%, from March 31, 2024. The decrease in the investment portfolio during the quarter was due to management’s decision to reinvest certain maturities into the loan portfolio. Deposits in other banks decreased $24.4 million from prior quarter but increased $34.7 million from March 31, 2024.

Deposits, including repurchase agreements, at $5.4 billion increased $47.5 million, or an annualized 3.6%, from December 31, 2024 and $338.9 million, or 6.8%, from March 31, 2024. CTBI is not dependent on any one customer or group of customers for their source of deposits. As of March 31, 2025, no one customer accounted for more than 3% of our $5.1 billion in deposits. Only two customer relationships accounted for more than 1% each.

Shareholders’ equity at $784.2 million increased $26.6 million, or an annualized 14.2%, during the quarter and $76.4 million, or 10.8%, from March 31, 2024. Net unrealized losses on securities, net of deferred taxes, were $86.1 million at March 31, 2025, compared to $98.4 million at December 31, 2024 and $106.9 million at March 31, 2024. CTBI’s annualized dividend yield to shareholders as of March 31, 2025 was 3.73%.

Loans

(dollars in thousands)	March 31, 2025
Loan Category	Balance		Variance from Prior Year			Net (Charge- Offs)/ Recoveries			Nonperforming		ACL
Commercial:
Hotel/motel	$	475,582		3.7	%	$	0		$	0	$	5,594
Commercial real estate residential		535,427		5.3			(13	)		2,955		6,059
Commercial real estate nonresidential		913,238		5.6			2			12,979		11,381
Dealer floorplans		75,101		(11.6	)		0			0		551
Commercial other		358,278		0.8			(324	)		1,848		3,936
Total commercial		2,357,626		3.7			(335	)		17,782		27,521

Residential:
Real estate mortgage		1,066,973		2.3			(66	)		7,309		12,322
Home equity		172,688		3.1			9			593		1,309
Total residential		1,239,661		2.4			(57	)		7,902		13,631

Consumer:
Consumer direct		150,614		(1.5	)		(187	)		194		2,127
Consumer indirect		888,635		4.5			(996	)		649		13,682
Total consumer		1,039,249		3.6			(1,183	)		843		15,809

Total loans	$	4,636,536		3.3	%	$	(1,575	)	$	26,527	$	56,961

Total Deposits and Repurchase Agreements

							Percent Change
							1Q 2025 Compared to:
(dollars in thousands)	1Q 2025		YE 2024		1Q 2024		YE 2024			1Q 2024
Noninterest bearing deposits	$	1,235,544	$	1,242,676	$	1,274,583		(0.6	)%		(3.1	)%
Interest bearing deposits
Interest checking		158,968		167,736		131,227		(5.2	)		21.1
Money market savings		1,828,051		1,781,415		1,608,849		2.6			13.
Savings accounts		516,379		511,378		543,338		1.			(5.0	)
Time deposits		1,372,363		1,366,984		1,226,273		0.4	%		11.9	%
Repurchase agreements		246,556		240,166		234,671		2.7			5.1
Total interest bearing deposits and repurchase agreements		4,122,317		4,067,679		3,744,358		1.3			10.1
Total deposits and repurchase agreements	$	5,357,861	$	5,310,355	$	5,018,941		0.9	%		6.8	%

Deposit Maturities

Maturities of uninsured certificates of deposit and other time deposits are presented below:

	Maturities by Period at March 31, 2025
(in thousands)	Total		Within 1 Year		2 Years		3 Years		4 Years		5 Years		After 5 Years
Uninsured certificates of deposits and other time deposits greater than $250,000	$	373,016	$	352,717	$	7,950	$	9,145	$	1,517	$	1,687	$	0

As of March 31, 2025, we had approximately $1.5 million in uninsured deposits. CTBI has no brokered deposits.

Repurchase Agreements

Repurchase agreements are accounted for as secured borrowings. The following table presents information regarding the balances of our repurchase agreement borrowings as of and for the periods indicated:

	Repurchase Agreements
($ in thousands)	Balance Outstanding as of Quarter End		Average Balance Outstanding For the Quarter End		Maximum Balance Outstanding During the Quarter Ended
March 31, 2025	$	246,556	$	233,470	$	246,556
December 31, 2024		240,166		233,183		240,166
March 31, 2024		234,671		225,734		234,671

Asset Quality

Our total nonperforming loans decreased to $26.5 million at March 31, 2025 from $26.7 million at December 31, 2024 but increased from $15.9 million at March 31, 2024. Accruing loans 90+ days past due at $10.8 million increased $0.5 million from prior quarter but decreased $0.7 million from March 31, 2024. Nonaccrual loans at $15.7 million decreased $0.7 million from prior quarter but increased $11.4 million from March 31, 2024. Accruing loans 30-89 days past due at $14.5 million decreased $2.3 million from prior quarter but increased $2.3 million from March 31, 2024. Nonaccrual loans to totals loans for the quarters ended March 31, 2025 and 2024 were 0.3% and 0.1%, respectively. The allowance for credit losses to nonaccrual loans for the quarters ended March 31, 2025 and 2024 was 363.0% and 1,175.5%, respectively. Our loan portfolio risk management processes include weekly delinquent loan review meetings at the market levels and monthly delinquent loan review meetings involving senior corporate management to review all nonaccrual loans and loans 30 days or more past due. Any activity regarding a criticized/classified loan (i.e. problem loan) must be approved by CTB’s Watch List Asset Committee (i.e. Problem Loan Committee). CTB’s Watch List Asset Committee also meets on a quarterly basis and reviews every criticized/classified loan of $100,000 or greater. CTB’s Loan Portfolio Risk Management Committee also meets quarterly focusing on the overall asset quality and risk metrics of the loan portfolio. We also have a Loan Review Department that reviews every market within CTB annually and performs extensive testing of the loan portfolio to assure the accuracy of loan grades and classifications for delinquency, loan modifications for borrowers experiencing financial difficulty, nonaccrual status, and adequate loan loss reserves. The Loan Review Department has annually reviewed on average 97% of the outstanding commercial loan portfolio for the past three years. The average annual review percentage of the consumer and residential loan portfolio for the past three years was 81% based on the loan production during the number of months included in the review scope. The review scope is generally four to six months of production. CTBI generally does not offer high risk loans such as option ARM products, high loan to value ratio mortgages, interest-only loans, loans with initial teaser rates, or loans with negative amortizations, and therefore, CTBI would have no significant exposure to these products. For further information regarding nonperforming loans, see Note 4 to the condensed consolidated financial statements contained herein.

We had net loan charge-offs of $1.6 million, or 0.14% of average loans annualized, for the first quarter of 2025 compared to $1.0 million, or 0.09% of average loans annualized, for the fourth quarter of 2024 and $1.6 million, or 0.16% of average loans annualized, for the first quarter of 2024. Of the net charge-offs for the quarter, $0.4 million were in indirect consumer loans, $0.3 million were in commercial loans, $0.8 million were in direct consumer loans, and $0.1 million were in residential loans.

Dividends

The following schedule shows the quarterly cash dividends paid for the past six quarters:

Pay Date	Record Date	Amount Per Share
April 1, 2025	March 15, 2025	$	0.47
January 1, 2025	December 15, 2024	$	0.47
October 1, 2024	September 15, 2024	$	0.47
July 1, 2024	June 15, 2024	$	0.46
April 1, 2024	March 15, 2024	$	0.46
January 1, 2024	December 15, 2023	$	0.46

Liquidity and Market Risk

The objective of CTBI’s Asset/Liability management function is to maintain consistent growth in net interest income within our policy limits. This objective is accomplished through management of our consolidated balance sheet composition, liquidity, and interest rate risk exposures arising from changing economic conditions, interest rates, and customer preferences. The goal of liquidity management is to provide adequate funds to meet changes in loan and lease demand or deposit withdrawals. This is accomplished by maintaining liquid assets in the form of cash and cash equivalents and investment securities, sufficient unused borrowing capacity, and growth in core deposits. As of March 31, 2025, we had approximately $340.7 million in cash and cash equivalents and approximately $111.0 million in unpledged securities valued at estimated fair value designated as available-for-sale and available to meet liquidity needs on a continuing basis compared to $369.5 million and $170.6 million, respectively, at December 31, 2024. Additional asset-driven liquidity is provided by the remainder of the securities portfolio and the repayment of loans. In addition to core deposit funding, we also have a variety of other short-term and long-term funding sources available. We also rely on Federal Home Loan Bank advances for both liquidity and management of our asset/liability position. Federal Home Loan Bank advances were $0.3 million at March 31, 2025 and December 31, 2024. As of March 31, 2025, we had a $508.5 million available borrowing position with the Federal Home Loan Bank, compared to $485.0 million at December 31, 2024. We generally rely upon net inflows of cash from financing activities, supplemented by net inflows of cash from operating activities, to provide cash for our investing activities. As is typical of many financial institutions, significant financing activities include deposit gathering, use of short-term borrowing facilities such as repurchase agreements and federal funds purchased, and issuance of long-term debt. At March 31, 2025 and December 31, 2024, we had $50 million in lines of credit with various correspondent banks available to meet any future cash needs. Our primary investing activities include purchases of securities and loan originations. We do not rely on any one source of liquidity and manage availability in response to changing consolidated balance sheet needs. Included in our cash and cash equivalents at March 31, 2025 were deposits with the Federal Reserve of $265.1 million, compared to $289.4 million at December 31, 2024. Additionally, we project cash flows from our investment portfolio to generate additional liquidity over the next 90 days.

The investment portfolio consists of investment grade short-term issues suitable for bank investments. The majority of the investment portfolio is in U.S. government and government sponsored agency issuances. At March 31, 2025, available-for-sale (“AFS”) securities comprised all of the total investment portfolio, and the AFS portfolio was approximately 129% of equity capital. Ninety-one percent of the pledge-eligible portfolio was pledged.

Interest Rate Risk

We consider interest rate risk one of our most significant market risks. Interest rate risk is the exposure to adverse changes in net interest income due to changes in interest rates. Consistency of our net interest revenue is largely dependent upon the effective management of interest rate risk. We employ a variety of measurement techniques to identify and manage our interest rate risk, including the use of an earnings simulation model to analyze net interest income sensitivity to changing interest rates. The model is based on actual cash flows and repricing characteristics for on and off-balance sheet instruments and incorporates market-based assumptions regarding the effect of changing interest rates on the prepayment rates of certain assets and liabilities. Assumptions based on the historical behavior of deposit rates and balances in relation to changes in interest rates are also incorporated into the model. These assumptions are inherently uncertain, and as a result, the model cannot precisely measure net interest income or precisely predict the impact of fluctuations in interest rates on net interest income. Actual results will differ from simulated results due to timing, magnitude, and frequency of interest rate changes as well as changes in market conditions and management strategies.

CTBI’s Asset/Liability Management Committee (ALCO), which includes executive and senior management representatives and reports to the Board of Directors, monitors and manages interest rate risk within Board-approved policy limits. Our current exposure to interest rate risks is determined by measuring the anticipated change in net interest income spread evenly over the twelve-month period.

Capital Resources

We continue to offer a dividend to our shareholders, providing an annualized dividend yield for the quarter ended March 31, 2025 of 3.73%. Our primary source of capital growth is the retention of earnings. Cash dividends were $0.47 per share for the three months ended March 31, 2025. We retained 61.5% of our earnings for the first three months of 2025 compared to 55.8% for the first three months of 2024.

Insured depository institutions are required to meet certain capital level requirements. On October 29, 2019, federal banking regulators adopted a final rule to simplify the regulatory capital requirements for eligible community banks and holding companies that opt-in to the community bank leverage ratio framework (the “CBLR framework”), as required by Section 201 of the Economic Growth, Relief and Consumer Protection Act of 2018. Under the final rule, which became effective as of January 1, 2020, community banks and holding companies (which includes CTB and CTBI) that satisfy certain qualifying criteria, including having less than $10 billion in average total consolidated assets and a leverage ratio (referred to as the “community bank leverage ratio”) of greater than 9%, were eligible to opt-in to the CBLR framework. The community bank leverage ratio is the ratio of a banking organization’s Tier 1 capital to its average total consolidated assets, both as reported on the banking organization’s applicable regulatory filings. Accordingly, a qualifying community banking organization that has a community bank leverage ratio greater than 9% will be considered to have met: (i) the risk-based and leverage capital requirements of the generally applicable capital rules; (ii) the capital ratio requirements in order to be considered well-capitalized under the prompt corrective action framework; and (iii) any other applicable capital or leverage requirements. Management elected to use the CBLR framework for CTBI and CTB. CTBI’s CBLR ratio as of March 31, 2025 was 13.81%. CTB’s CBLR ratio as of March 31, 2025 was 13.32%.

As of March 31, 2025, we are not aware of any current recommendations by banking regulatory authorities which, if they were to be implemented, would have, or are reasonably likely to have, a material adverse impact on our liquidity, capital resources, or operations.

Impact of Inflation, Changing Prices, and Economic Conditions

The majority of our assets and liabilities are monetary in nature. Therefore, CTBI differs greatly from most commercial and industrial companies that have significant investment in nonmonetary assets, such as fixed assets and inventories. However, inflation does have an important impact on the growth of assets in the banking industry and on the resulting need to increase equity capital at higher than normal rates in order to maintain an appropriate equity to assets ratio. Inflation also affects other expenses, which tend to rise during periods of general inflation.

We believe one of the most significant impacts on financial and operating results is our ability to react to changes in interest rates. We seek to maintain an essentially balanced position between interest rate sensitive assets and liabilities in order to protect against the effects of wide interest rate fluctuations.

Stock Repurchase Program

CTBI’s stock repurchase program began in December 1998 with the authorization to acquire up to 500,000 shares and was increased by an additional 1,000,000 shares in each of July 2000, May 2003, and March 2020. As of March 31, 2025, a total of 2,465,294 shares have been repurchased through this program, leaving 1,034,706 shares remaining under our current repurchase authorization.

Critical Accounting Estimates

The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires the appropriate application of certain accounting policies, many of which require us to make estimates and assumptions about future events and their impact on amounts reported in our consolidated financial statements and related notes. Since future events and their impact cannot be determined with certainty, the actual results will inevitably differ from our estimates. Such differences could be material to the consolidated financial statements.

We believe the application of accounting policies and the estimates required therein are reasonable. These accounting policies and estimates are constantly reevaluated, and adjustments are made when facts and circumstances dictate a change. Historically, we have found our application of accounting estimates to be appropriate, and actual results have not differed materially from those determined using necessary estimates.

Our accounting policies are described in Note 1 to the condensed consolidated financial statements contained herein. We have identified the following critical accounting estimates:

Allowance for Credit Losses – We disaggregate our portfolio loans into portfolio segments for purposes of determining the ACL. Our loan portfolio segments include commercial, residential mortgage, and consumer. We further disaggregate our portfolio segments into classes for purposes of monitoring and assessing credit quality based on certain risk characteristics. For an analysis of CTBI’s ACL by portfolio segment and credit quality information by class, refer to Note 4 to the condensed consolidated financial statements contained herein.

The ACL is maintained at a level CTBI considers to be adequate and is based on ongoing quarterly assessments and evaluations of the collectability of loans, including historical credit loss experience, current and forecasted market and economic conditions, and consideration of various qualitative factors that, in management’s judgment, deserve consideration in estimating expected credit losses. Provisions for credit losses are recorded for the amounts necessary to adjust the ACL to CTBI’s current estimate of expected credit losses on portfolio loans. CTBI’s strategy for credit risk management includes a combination of conservative exposure limits significantly below legal lending limits and conservative underwriting, documentation, and collection standards. The strategy also emphasizes diversification on a geographic, industry, and customer level, regular credit examinations, and quarterly management reviews of large credit exposures and loans experiencing deterioration of credit quality.

CTBI’s methodology for determining the ACL requires significant management judgment and includes an estimate of expected credit losses on a collective basis for groups of loans with similar risk characteristics and specific allowances for loans which are individually evaluated.

Larger commercial loans with balances exceeding $1 million that exhibit probable or observed credit weaknesses and (i) have a criticized risk rating, (ii) are on nonaccrual status, (iii) have a borrower experiencing financial difficulty with significant payment delay, or (iv) are 90 days or more past due, are individually evaluated for an ACL. CTBI considers the current value of collateral, credit quality of any guarantees, the guarantor’s liquidity and willingness to cooperate, the loan structure and other factors when determining the amount of the ACL. Other factors may include the borrower’s susceptibility to risks presented by the forecasted macroeconomic environment, the industry and geographic region of the borrower, size and financial condition of the borrower, cash flow and leverage of the borrower, and our evaluation of the borrower’s management. Significant management judgment is required when evaluating which of these factors are most relevant in individual circumstances, and when estimating the amount of expected credit losses based on those factors. When loans are individually evaluated, allowances are determined based on management’s estimate of the borrower’s ability to repay the loan given the availability of collateral and other sources of cash flow, as well as an evaluation of legal options available to CTBI. Allowances for individually evaluated loans that are collateral-dependent are typically measured based on the fair value of the underlying collateral, less expected costs to sell where applicable. For collateral-dependent financial assets, the credit loss expected may be zero if the fair value less costs to sell exceeds the amortized cost of the loan. Loans shall not be included in both collective assessments and individual assessments. Individually evaluated loans that are not collateral-dependent are measured based on the present value of expected future cash flows discounted at the loan’s effective interest rate. Specific allowances on individually evaluated commercial loans, including loans to borrowers experiencing financial difficulty, are reviewed quarterly and adjusted as necessary based on changing borrower and/or collateral conditions and actual collection and charge-off experience. Regardless of an initial measurement method, once it is determined that foreclosure is probable, the ACL is measured based on the fair value of the collateral as of the measurement date. As a practical expedient, the fair value of the collateral may be used for a loan when determining the ACL for which the repayment is expected to be provided substantially through the operation or sale of the collateral when the borrower is experiencing financial difficulty. The fair value shall be adjusted for selling costs when foreclosure is probable.

Expected credit losses are estimated on a collective basis for loans that are not individually evaluated. These include commercial loans that do not meet the criteria for individual evaluation as well as homogeneous loans in the residential mortgage and consumer portfolio segments. CTBI uses a discounted cash flow (“DCF”) model for all loan segments. The primary reasons that contributed to this decision were: DCF models allow for the effective incorporation of a reasonable and supportable forecast in a directionally consistent and objective manner; the analysis aligns well with other calculations outside of the ACL estimation which will mitigate model risk in other areas; and peer data is available for certain inputs if first party data is not available or meaningful. Expected credit losses are estimated on a collective basis for loans that are not individually evaluated. These include commercial loans that do not meet the criteria for individual evaluation as well as homogeneous loans in the residential mortgage and consumer portfolio segments. See Note 4 to the condensed consolidated financial statements contained herein for information on CTBI’s risk rating system.

CTBI’s expected credit loss models consider historical credit loss experience, peer data, current market and economic conditions, and forecasted changes in market and economic conditions if such forecasts are considered reasonable and supportable. Generally, CTBI considers our forecasts to be reasonable and supportable for a period of up to one year from the estimation date. For periods beyond the reasonable and supportable forecast period, expected credit losses are estimated by reverting to historical loss information on an input basis. CTBI reverts to a long-run average of the modeled economic factors over four quarters to derive a long-run average probability of default/loss given default. CTBI evaluates the length of our reasonable and supportable forecast period, our reversion period, and reversion methodology at least annually, or more often if warranted by economic conditions or other circumstances.

Other qualitative factors are used by CTBI in determining the ACL. These considerations inherently require significant management judgment to determine the appropriate factors to be considered and the extent of their impact on the ACL estimate. Qualitative factors are used to capture characteristics in the portfolio that impact expected credit losses but that are not fully captured within CTBI’s expected credit loss models. These include adjustments for changes in policies or procedures in underwriting, monitoring or collections, lending and risk management personnel, and results of internal audit and quality control reviews. These may also include adjustments, when deemed necessary, for specific idiosyncratic risks such as geopolitical events, natural disasters and their effects on regional borrowers, and changes in product structures. Qualitative factors may also be used to address the impacts of unforeseen events on key inputs and assumptions within CTBI’s expected credit loss models, such as the reasonable and supportable forecast period, changes to historical loss information, or changes to the reversion period or methodology. When evaluating the adequacy of allowances, consideration is also given to regional geographic concentrations and the closely associated effect that changing economic conditions may have on CTBI’s customers.

Overall, the collective evaluation process requires significant management judgment when determining the estimation methodology and inputs into the models, as well as in evaluating the reasonableness of the modeled results and the appropriateness of qualitative adjustments. CTBI’s forecasts of market and economic conditions and the internal risk grades assigned to loans in the commercial portfolio segment are examples of inputs to the expected credit loss models that require significant management judgment. These inputs have the potential to drive significant variability in the resulting ACL.

The reserve for unfunded commitments is maintained at a level believed by management to be sufficient to absorb estimated expected credit losses related to unfunded credit facilities and is included in other liabilities in the consolidated balance sheets. The determination of the adequacy of the reserve is based upon expected credit losses over the remaining contractual life of the commitments, taking into consideration the current funded balance and estimated exposure over the reasonable and supportable forecast period. This process takes into consideration the same risk elements that are analyzed in the determination of the adequacy of CTBI’s ACL, as previously discussed.

Goodwill – Business combinations entered into by CTBI typically include the recognition of goodwill. GAAP requires goodwill to be tested for impairment on an annual basis, which for CTBI is October 1, and more frequently if events or circumstances indicate that there may be impairment.

Impairment exists when a reporting unit’s carrying amount of goodwill exceeds its implied fair value. In testing goodwill for impairment, GAAP permits companies to first assess qualitative factors to determine whether it is more likely than not that its fair value is less than its carrying amount. In this qualitative assessment, CTBI evaluates events and circumstances which may include, but are not limited to, the general economic environment, banking industry and market conditions, the overall financial performance of CTBI, and the performance of CTBI’s common stock, to determine if it is not more likely than not that the fair value is less than its carrying amount. If the quantitative impairment test is required or the decision to bypass the qualitative assessment is elected, CTBI performs the goodwill impairment test by comparing its fair value with its carrying amount, including goodwill. If the carrying amount exceeds its fair value, an impairment loss is recognized in an amount equal to that excess, limited to the total amount of goodwill recorded. A recognized impairment loss cannot be reversed in future periods even if the fair value of the reporting unit subsequently recovers.

The fair value of CTBI is the price that would be received to sell the company as a whole in an orderly transaction between market participants at the measurement date. The determination of the fair value is a subjective process that involves the use of estimates and judgments, particularly related to cash flows, the appropriate discount rates and an applicable control premium. CTBI employs an income-based approach, utilizing forecasted cash flows and the estimated cost of equity as the discount rate. Significant management judgment is necessary in the preparation of the forecasted cash flows surrounding expectations for earnings projections, growth and credit loss expectations, and actual results may differ from forecasted results.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Interest rate risk management focuses on maintaining consistent growth in net interest income within Board-approved policy limits. CTBI uses an earnings simulation model to analyze net interest income sensitivity to movements in interest rates. Given a 200 basis point increase to the yield curve used in the simulation model, it is estimated net interest income for CTBI would increase by 2.56% over one year and 4.08% over two years. A 200 basis point decrease in the yield curve would decrease net interest income by an estimated 3.08% over one year and 5.24% over two years. For further discussion of CTBI’s market risk, see the Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Market Risk included in the annual report on Form 10-K for the year ended December 31, 2024.

Item 4. Controls and Procedures

EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

CTBI’s management is responsible for establishing and maintaining effective disclosure controls and procedures, as defined under Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934. As of March 31, 2025, an evaluation was carried out by CTBI’s management, with the participation of our Chief Executive Officer and our Chief Financial Officer of the effectiveness of the design and operation of our disclosure controls and procedures. Based on this evaluation, management concluded that disclosure controls and procedures as of March 31, 2025 were effective in ensuring material information required to be disclosed in this quarterly report on Form 10-Q was recorded, processed, summarized, and reported on a timely basis.

CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING

There were no changes in CTBI’s internal control over financial reporting that occurred during the three months ended March 31, 2025 that have materially affected, or are reasonably likely to materially affect, CTBI’s internal control over financial reporting.

PART II - OTHER INFORMATION

Item 1.	Legal Proceedings	None

Item 1A.	Risk Factors	None

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	None

Item 3.	Defaults Upon Senior Securities	None

Item 4.	Mine Safety Disclosure	Not applicable

Item 5.	Other Information:

(a)	Information required to be disclosed in a report on Form 8-K	None

(b)	Changes to director nomination procedures	None

(c)	Insider trading arrangements

	During the three months ended March 31, 2025, no director or officer of CTBI adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.

Item 6.	Exhibits:
	(1) Certifications Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002	Exhibit 31.1 Exhibit 31.2
	(2) Certifications Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002	Exhibit 32.1 Exhibit 32.2
	(3) XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL	Exhibit 101.INS
	(4) XBRL Taxonomy Extension Schema Document	Exhibit 101.SCH
	(5) XBRL Taxonomy Extension Calculation Linkbase	Exhibit 101.CAL
	(6) XBRL Taxonomy Extension Definition Linkbase	Exhibit 101.DEF
	(7) XBRL Taxonomy Extension Label Linkbase	Exhibit 101.LAB
	(8) XBRL Taxonomy Extension Presentation Linkbase	Exhibit 101.PRE
	(9) Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)	Exhibit 104

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, CTBI has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	COMMUNITY TRUST BANCORP, INC.

Date: May 9, 2025	By:

	/s/ Mark A. Gooch
	Mark A. Gooch
	Chairman, President, and Chief Executive Officer

	/s/ Kevin J. Stumbo
	Kevin J. Stumbo
	Executive Vice President, Chief Financial Officer,
	and Treasurer