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, 2025 for further information in this regard.
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Condensed Consolidated Balance Sheets
| (in thousands except share data) | (unaudited) June 30 2026 | December 31 2025 |
|---|---|---|
| Assets: | ||
| Cash and due from banks | ||
| Interest bearing deposits | ||
| Cash and cash equivalents | 514,347 | 363,684 |
| Certificates of deposit in other banks | 245 | 245 |
| Debt securities available-for-sale at fair value (amortized cost of and , respectively) | ||
| Equity securities at fair value | 4,578 | 4,154 |
| Loans held for sale | 0 | 211 |
| Loans | ||
| Allowance for credit losses | (63,001) | (60,169) |
| Net loans | ||
| Premises and equipment, net | ||
| Operating right-of-use assets | ||
| Finance right-of-use assets | ||
| Federal Home Loan Bank stock | ||
| Federal Reserve Bank stock | ||
| Goodwill | ||
| Bank owned life insurance | ||
| Mortgage servicing rights | ||
| Other real estate owned | 3,517 | 3,066 |
| Deferred tax asset | ||
| Accrued interest receivable | 25,820 | 25,957 |
| Other assets | ||
| Total assets | ||
| Liabilities and shareholders’ equity: | ||
| Deposits: | ||
| Noninterest bearing | ||
| Interest bearing | ||
| Total deposits | ||
| Repurchase agreements | 297,094 | 308,799 |
| Federal funds purchased | ||
| Advances from Federal Home Loan Bank | 284 | 293 |
| Long-term debt | 63,664 | 63,784 |
| Operating lease liabilities | ||
| Finance lease liabilities | ||
| Accrued interest payable | 16,420 | 8,535 |
| Other liabilities | 45,819 | 40,680 |
| Total liabilities | 6,097,544 | 5,828,066 |
| Shareholders’ equity: | ||
| Preferred stock, shares authorized and unissued | ||
| Common stock, par value, shares authorized ; shares issued and outstanding 2026 – ; 2025 – | ||
| Capital surplus | ||
| Retained earnings | 631,559 | 593,888 |
| Accumulated other comprehensive loss, net of tax | (68,436) | (64,820) |
| Total shareholders’ equity | 891,827 | 856,072 |
| Total liabilities and shareholders’ equity |
See notes to condensed consolidated financial statements.
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Condensed Consolidated Statements of Income and Comprehensive Income
unaudited
| (in thousands except per share data) | Three Months Ended · June 302026 | Three Months Ended · June 302025 | Six Months Ended · June 302026 | Six Months Ended · June 302025 |
|---|---|---|---|---|
| Interest income: | ||||
| Interest and fees on loans, including loans held for sale | ||||
| Interest and dividends on securities | ||||
| Taxable | ||||
| Tax exempt | ||||
| Interest and dividends on Federal Reserve Bank and Federal Home Loan Bank stock | ||||
| Interest on Federal Reserve Bank deposits | ||||
| Other, including interest on federal funds sold | ||||
| Total interest income | ||||
| Interest expense: | ||||
| Interest on deposits | ||||
| Interest on repurchase agreements and federal funds purchased | ||||
| Interest on advances from Federal Home Loan Bank | ||||
| Interest on long-term debt | ||||
| Total interest expense | ||||
| Net interest income | ||||
| Provision for credit losses | ||||
| Net interest income after provision for credit losses | ||||
| Noninterest income: | ||||
| Deposit related fees | ||||
| Gains on sales of loans, net | ||||
| Trust and wealth management income | ||||
| Loan related fees | ||||
| Bank owned life insurance revenue | ||||
| Brokerage revenue | ||||
| Securities gains | ||||
| Other noninterest income | ||||
| Total noninterest income | ||||
| Noninterest expense: | ||||
| Officer salaries and employee benefits | ||||
| Other salaries and employee benefits | ||||
| Occupancy, net | ||||
| Equipment | ||||
| Data processing | ||||
| Taxes other than property and payroll | ||||
| Legal fees | ||||
| Professional fees | ||||
| Advertising and marketing | ||||
| FDIC insurance | ||||
| Other real estate owned provision and expense | ||||
| Repossession expense | ||||
| Other noninterest expense | ||||
| Total noninterest expense | ||||
| Income before income taxes | ||||
| Income taxes | ||||
| Net income | ||||
| Other comprehensive income (loss): | ||||
| Unrealized holding gains (losses) arising during the period | () | () | ||
| Less: Reclassification adjustments for realized gains included in net income | ||||
| Tax expense (benefit) | () | () | ||
| Other comprehensive income (loss), net of tax | () | () | ||
| Comprehensive income | ||||
| Basic earnings per share | ||||
| Diluted earnings per share | ||||
| Weighted average shares outstanding-basic | ||||
| Weighted average shares outstanding-diluted |
See notes to condensed consolidated financial statements.
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Consolidated Statements of Changes in Shareholders’ Equity
Quarterly
(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, March 31, 2026 | 18,155,771 | $90,781 | $236,998 | $611,510 | $(68,044) | $871,245 |
| Net income | 29,623 | |||||
| Other comprehensive income (loss) | (392) | () | ||||
| Cash dividends declared ( per share) | (9,574) | () | ||||
| Issuance of common stock | 8,576 | 43 | 459 | |||
| Issuance of restricted stock | 0 | (1) | 1 | |||
| Vesting of restricted stock | (626) | (3) | 3 | |||
| Stock-based compensation | 423 | |||||
| Balance, June 30, 2026 | 18,163,721 | $90,820 | $237,884 | $631,559 | $(68,436) | $891,827 |
| (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, March 31, 2025 | 18,101,765 | $90,510 | $234,355 | $545,372 | $(86,065) | $784,172 |
| Net income | 24,899 | |||||
| Other comprehensive income (loss) | 5,448 | |||||
| Cash dividends declared ( per share) | (8,466) | () | ||||
| Issuance of common stock | 11,776 | 59 | 397 | |||
| Issuance of restricted stock | (2,608) | (14) | 14 | |||
| Vesting of restricted stock | (5,562) | (28) | 28 | |||
| Stock-based compensation | 360 | |||||
| Balance, June 30, 2025 | 18,105,371 | $90,527 | $235,154 | $561,805 | $(80,617) | $806,869 |
See notes to condensed consolidated financial statements.
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Consolidated Statements of Changes in Shareholders’ Equity
Year-to-Date
(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, 2025 | 18,115,847 | $90,581 | $236,423 | $593,888 | $(64,820) | $856,072 |
| Net income | 56,815 | |||||
| Other comprehensive income (loss) | (3,616) | () | ||||
| Cash dividends declared ( per share) | (19,144) | () | ||||
| Issuance of common stock | 39,226 | 196 | 631 | |||
| Issuance of restricted stock | 34,175 | 171 | (171) | |||
| Vesting of restricted stock | (25,527) | (128) | 128 | |||
| Stock-based compensation | 873 | |||||
| Balance, June 30, 2026 | 18,163,721 | $90,820 | $237,884 | $631,559 | $(68,436) | $891,827 |
| (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 | 46,871 | |||||
| Other comprehensive income (loss) | 17,752 | |||||
| Cash dividends declared ( per share) | (16,927) | () | ||||
| Issuance of common stock | 42,578 | 213 | 519 | |||
| Issuance of restricted stock | 38,538 | 193 | (193) | |||
| Vesting of restricted stock | (28,106) | (141) | 141 | |||
| Forfeiture of restricted stock | (5,562) | (28) | 28 | 0 | ||
| Stock-based compensation | 857 | |||||
| Balance, June 30, 2025 | 18,105,371 | $90,527 | $235,154 | $561,805 | $(80,617) | $806,869 |
See notes to condensed consolidated financial statements.
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Condensed Consolidated Statements of Cash Flows
unaudited
| (in thousands) | Six Months Ended · June 302026 | Six Months Ended · June 302025 |
|---|---|---|
| Cash flows from operating activities: | ||
| Net income | ||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||
| Depreciation and amortization | ||
| Amortization of operating lease right-of-use assets | ||
| Deferred tax expense (benefit) | () | |
| Stock-based compensation | ||
| Provision for credit losses | ||
| Write-downs of other real estate owned and other repossessed assets | 15 | 36 |
| Gains on sale of mortgage loans held for sale | () | () |
| Securities gains | () | () |
| Fair value adjustments in equity securities | () | () |
| (Gains) losses on sale of assets, net | () | |
| Proceeds from sale of mortgage loans held for sale | ||
| Funding of mortgage loans held for sale | (3,843) | (4,669) |
| Amortization of securities premiums and discounts, net | ||
| Change in cash surrender value of bank owned life insurance | () | () |
| Payment of operating lease liabilities | () | () |
| Interest expense on finance lease liabilities | 110 | 81 |
| Fair value adjustment in mortgage servicing rights: | ||
| Changes in: | ||
| Accrued interest receivable | ||
| Other assets | () | |
| Accrued interest payable | ||
| Other liabilities | () | |
| Net cash provided by operating activities | ||
| Cash flows from investing activities: | ||
| Securities available-for-sale (AFS): | ||
| Purchase of AFS securities | () | () |
| Proceeds from sales of AFS securities | ||
| Proceeds from prepayments, calls, and maturities of AFS securities | ||
| Change in loans, net | () | () |
| Purchase of premises and equipment | () | () |
| Purchase of Federal Home Loan Bank stock | (325) | (4,491) |
| Proceeds from sale of other real estate owned and repossessed assets | 29 | 375 |
| Additional investment in bank owned life insurance | () | |
| Redemption of bank owned life insurance | ||
| Proceeds from settlement of bank owned life insurance | ||
| Net cash used in investing activities | () | () |
See notes to condensed consolidated financial statements.
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| Cash flows from financing activities: | ||
|---|---|---|
| Change in deposits, net | ||
| Change in repurchase agreements and federal funds purchased, net | () | () |
| Proceeds from Federal Home Loan Bank advances | ||
| Payments on advances from Federal Home Loan Bank | () | () |
| Payment of finance lease liabilities | () | () |
| Repayment of long-term debt/other borrowings | () | () |
| Issuance of common stock | ||
| Dividends paid | () | () |
| Net cash provided by financing activities | ||
| Net decrease in cash and cash equivalents | 150,663 | 25,785 |
| Cash and cash equivalents at beginning of period | 363,684 | 369,505 |
| Cash and cash equivalents at end of period | $514,347 | 395,290 |
| Supplemental disclosures: | ||
| Income taxes paid | ||
| Interest paid | ||
| Non-cash activities: | ||
| Loans to facilitate the sale of other real estate owned and repossessed assets | 233 | 2,248 |
| Common stock dividends accrued, paid in subsequent quarter | ||
| Real estate acquired in settlement of loans | ||
| Right-of-use assets obtained in exchange for new operating lease liabilities |
See notes to condensed consolidated financial statements.
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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, 2025 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, 2025, 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.
Use of Estimates
In preparing the consolidated financial statements, management must make certain estimates and assumptions. These estimates and assumptions affect the amounts reported for assets, liabilities, revenues, and expenses, as well as the disclosures provided. Future results could differ from the current estimates. Such estimates include, but are not limited to, the allowance for credit losses (“ACL”), goodwill, and the valuation of financial instruments. The accompanying financial statements have been prepared using values and information currently available to CTBI. Given the volatility of current economic conditions, the values of assets and liabilities recorded in the financial statements could change rapidly, resulting in material future adjustments in asset values, the ACL, and capital.
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Emerging GAAP
Recently Issued Accounting Guidance, Not Yet Adopted as of June 30, 2026
- Standard Description Date of Planned Adoption Effect on Consolidated Financial Statements
- ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses In November 2024, the FASB issued ASU 2024-03 which is intended to improve disclosures by providing more detailed information about the types of expenses in commonly presented expense captions in the income statement. For annual periods beginning in 2027 and interim periods beginning in 2028 This ASU will result in additional disclosures related to our noninterest expense, but CTBI does not expect it will have a material impact on our consolidated financial statements. Adoption of this ASU should be applied on a prospective basis, but retrospective application is permitted.
- ASU 2025-08, Financial Instruments – Credit Losses (Topic 326): Purchased Loans In November 2025, the FASB issued ASU 2025-08 in response to stakeholders’ concerns about the accounting for acquired financial assets in accordance with ASC 326. The ASU amends the current expected credit loss (CECL) model in ASC 326-20 to: (1) expand the population of acquired financial assets subject to the “gross-up approach” for measuring credit losses to apply to “seasoned” purchased loans—this approach allows entities to avoid recording a day-one credit loss expense in profit or loss but also reduces interest income recognized in later periods; and (2) introduce criteria for determining whether a purchased loan is considered “seasoned” and will be accounted for using the gross-up approach. For interim and annual periods beginning in 2027 This ASU has no impact on CTBI’s financial statements at this time. Early adoption is allowed.
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Note 2 – Securities
The amortized cost and fair value of debt securities available-for-sale are summarized as follows:
June 30, 2026
| (in thousands) | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value |
|---|---|---|---|---|
| U.S. Treasury and government agencies | $154,652 | $47 | $(7,393) | $147,306 |
| State and political subdivisions | 285,200 | 51 | (37,266) | 247,985 |
| Agency mortgage-backed securities | 687,825 | 234 | (46,722) | 641,337 |
| Asset-backed securities | 15,042 | 26 | (15) | 15,053 |
| Total available-for-sale securities | $() |
December 31, 2025
| (in thousands) | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value |
|---|---|---|---|---|
| U.S. Treasury and government agencies | $243,840 | $65 | $(8,146) | $235,759 |
| State and political subdivisions | 303,118 | 117 | (36,344) | 266,891 |
| Agency mortgage-backed securities | 630,172 | 1,119 | (43,029) | 588,262 |
| Asset-backed securities | 29,808 | 57 | (58) | 29,807 |
| Total available-for-sale securities | $() |
The amounts reported in the preceding tables exclude accrued interest on securities of $4.3 million and $4.5 million at June 30, 2026 and December 31, 2025, 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 June 30, 2026 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.
| (in thousands) | Available-for-SaleAmortized Cost | Available-for-SaleFair Value |
|---|---|---|
| Due in one year or less | ||
| Due after one through five years | ||
| Due after five through ten years | ||
| Due after ten years | ||
| Agency mortgage-backed securities | 687,825 | 641,337 |
| Asset-backed securities | 15,042 | 15,053 |
| Total debt securities |
During the three months ended June 30, 2026, we had a net securities gain of thousand, consisting of a pre-tax gain of thousand on sales and calls of AFS securities and an unrealized gain of thousand from the fair value adjustment of equity securities. During the three months ended June 30, 2025, we had a net securities gain of thousand, consisting of a pre-tax gain of thousand on calls of AFS securities and an unrealized gain of thousand from the fair value adjustment of equity securities. During the six months ended June 30, 2026, we had a net securities gain of thousand, consisting of a pre-tax gain of thousand realized on sales and calls of AFS securities and an unrealized gain of thousand from the fair value adjustment of equity securities. During the six months ended June 30, 2025, we had a net securities gain of thousand, consisting of a pre-tax gain of thousand realized on calls of AFS securities and an unrealized gain of 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 $591.5 million and $602.6 million at June 30, 2026 and December 31, 2025, respectively.
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The fair value of securities pledged was $541.7 million and $556.9 million at June 30, 2026 and December 31, 2025, respectively.
The amortized cost of securities sold under agreements to repurchase amounted to $400.2 million and $386.8 million at June 30, 2026 and December 31, 2025, respectively. The fair value of securities pledged was million and million at June 30, 2026 and December 31, 2025, respectively.
CTBI evaluates its investment portfolio on a quarterly basis for impairment. The analysis performed as of June 30, 2026 and December 31, 2025 indicates that all impairment is market and interest rate driven and not credit-related. The percentage of total debt securities with unrealized losses as of June 30, 2026 was % compared to % as of December 31, 2025. The following tables provide the amortized cost, gross unrealized losses, and fair value of debt securities available-for-sale, aggregated by investment category and length of time the individual securities have been in a continuous unrealized loss position as of the periods indicated that are not deemed to have credit losses.
June 30, 2026
| (in thousands)Less Than 12 Months | Amortized Cost | Gross Unrealized Losses | Fair Value |
|---|---|---|---|
| U.S. Treasury and government agencies | $10 | $0 | $10 |
| State and political subdivisions | 11,818 | (1,105) | 10,713 |
| Agency mortgage-backed securities | 286,796 | (3,351) | 283,445 |
| Asset-backed securities | 8,276 | (15) | 8,261 |
| Total <12 months AFS securities with unrealized losses | () | ||
| 12 Months or More | |||
| U.S. Treasury and government agencies | 151,452 | (7,393) | 144,059 |
| State and political subdivisions | 262,693 | (36,161) | 226,532 |
| Agency mortgage-backed securities | 357,320 | (43,371) | 313,949 |
| Asset-backed securities | 0 | 0 | 0 |
| Total ≥12 months AFS securities with unrealized losses | () | ||
| Total | |||
| U.S. Treasury and government agencies | 151,462 | (7,393) | 144,069 |
| State and political subdivisions | 274,511 | (37,266) | 237,245 |
| Agency mortgage-backed securities | 644,116 | (46,722) | 597,394 |
| Asset-backed securities | 8,276 | (15) | 8,261 |
| Total AFS securities with unrealized losses | $() |
December 31, 2025
| (in thousands)Less Than 12 Months | Amortized Cost | Gross Unrealized Losses | Fair Value |
|---|---|---|---|
| U.S. Treasury and government agencies | $954 | $(2) | $952 |
| State and political subdivisions | 8,129 | (1,232) | 6,897 |
| Agency mortgage-backed securities | 113,962 | (633) | 113,329 |
| Asset-backed securities | 6,911 | (2) | 6,909 |
| Total <12 months AFS securities with unrealized losses | () | ||
| 12 Months or More | |||
| U.S. Treasury and government agencies | 238,808 | (8,144) | 230,664 |
| State and political subdivisions | 274,927 | (35,112) | 239,815 |
| Agency mortgage-backed securities | 384,506 | (42,396) | 342,110 |
| Asset-backed securities | 16,235 | (56) | 16,179 |
| Total ≥12 months AFS securities with unrealized losses | () | ||
| Total | |||
| U.S. Treasury and government agencies | 239,762 | (8,146) | 231,616 |
| State and political subdivisions | 283,056 | (36,344) | 246,712 |
| Agency mortgage-backed securities | 498,468 | (43,029) | 455,439 |
| Asset-backed securities | 23,146 | (58) | 23,088 |
| Total AFS securities with unrealized losses | $() |
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Equity Securities at Fair Value
Equity securities at fair value as of June 30, 2026 were $4.6 million, as a result of a $912 thousand increase in the fair value during the quarter. Equity securities at fair value as of December 31, 2025 were $4.2 million, as a result of a $373 thousand increase in the fair value in 2025. equity securities were sold during 2025 or the first six months of 2026.
Note 3 – 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:
| (in thousands) | June 30 2026 | December 31 2025 |
|---|---|---|
| Hotel/motel | $528,697 | $497,764 |
| Commercial real estate residential | 599,454 | 580,652 |
| Commercial real estate nonresidential | 1,005,462 | 959,915 |
| Dealer floorplans | 79,821 | 83,812 |
| Commercial other | 384,080 | 371,132 |
| Commercial loans | 2,597,514 | 2,493,275 |
| Real estate mortgage | 1,289,157 | 1,206,820 |
| Home equity lines | 195,270 | 186,798 |
| Residential loans | 1,484,427 | 1,393,618 |
| Consumer direct | 139,865 | 145,591 |
| Consumer indirect | 903,125 | 862,458 |
| Consumer loans | 1,042,990 | 1,008,049 |
| Net loans |
Unearned fees included above totaled thousand and thousand as of June 30, 2026 and December 31, 2025, respectively, while the unamortized premiums on the indirect lending portfolio totaled $36.9 million and $34.5 million as of June 30, 2026 and December 31, 2025, respectively.
Loans identified to be sold into the secondary market are classified as held for sale and are not included in the loans balances above. Loans held for sale are recorded at lower of cost or fair value. There were loans held for sale at June 30, 2026 compared to million at December 31, 2025.
Accrued interest receivable from loans, which is excluded from loan balances, was million and million at June 30, 2026 and December 31, 2025, respectively.
CTBI has segregated and evaluates our loan portfolio through portfolio segments with similar risk characteristics. CTBI serves customers in small and mid-sized communities in eastern, northeastern, central, and south central Kentucky, southern West Virginia, and northeastern Tennessee. Therefore, CTBI’s exposure to credit risk is significantly affected by changes in these communities.
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Allowance for Credit Losses
The balance in the allowance for credit losses increased during the quarter, primarily as a result of the change in loan volume with significant increases in the commercial, residential, and consumer indirect loan portfolios. The following tables present the activity in the ACL for loans for the periods indicated.
Three Months Ended June 30, 2026
| ($ in thousands) | Beginning Balance | Provision Charged to Expense | Losses Charged Off | Recoveries | Ending Balance | % of Total ACL |
|---|---|---|---|---|---|---|
| ACL | ||||||
| Hotel/motel | $6,777 | $339 | $0 | $0 | $7,116 | 11.3% |
| Commercial real estate residential | 6,466 | (170) | 0 | 5 | 6,301 | 10.0 |
| Commercial real estate nonresidential | 12,107 | (583) | (10) | 3 | 11,517 | 18.3 |
| Dealer floorplans | 837 | 18 | 0 | 0 | 855 | 1.3 |
| Commercial other | 3,916 | 583 | (308) | 66 | 4,257 | 6.8 |
| Real estate mortgage | 14,687 | 1,090 | (6) | 10 | 15,781 | 25.0 |
| Home equity | 1,301 | 99 | 0 | 1 | 1,401 | 2.2 |
| Consumer direct | 1,814 | 219 | (338) | 108 | 1,803 | 2.9 |
| Consumer indirect | 13,416 | 1,002 | (1,450) | 1,002 | 13,970 | 22.2 |
| Total ACL | $61,321 | $(2,112) | $63,001 | % |
Six Months Ended June 30, 2026
| ($ in thousands) | Beginning Balance | Provision Charged to Expense | Losses Charged Off | Recoveries | Ending Balance | % of Total ACL |
|---|---|---|---|---|---|---|
| ACL | ||||||
| Hotel/motel | $6,902 | $214 | $0 | $0 | $7,116 | 11.3% |
| Commercial real estate residential | 6,397 | (99) | (7) | 10 | 6,301 | 10.0 |
| Commercial real estate nonresidential | 11,630 | (35) | (84) | 6 | 11,517 | 18.3 |
| Dealer floorplans | 798 | 57 | 0 | 0 | 855 | 1.3 |
| Commercial other | 3,620 | 1,312 | (860) | 185 | 4,257 | 6.8 |
| Real estate mortgage | 14,047 | 1,910 | (195) | 19 | 15,781 | 25.0 |
| Home equity | 1,276 | 137 | (14) | 2 | 1,401 | 2.2 |
| Consumer direct | 1,971 | 181 | (563) | 214 | 1,803 | 2.9 |
| Consumer indirect | 13,528 | 1,390 | (3,075) | 2,127 | 13,970 | 22.2 |
| Total ACL | $60,169 | $(4,798) | $63,001 | % |
Three Months Ended June 30, 2025
| ($ in thousands) | Beginning Balance | Provision Charged to Expense | Losses Charged Off | Recoveries | Ending Balance | % of Total ACL |
|---|---|---|---|---|---|---|
| ACL | ||||||
| Hotel/motel | $5,594 | $10 | $0 | $0 | $5,604 | 9.7% |
| Commercial real estate residential | 6,059 | 457 | (41) | 5 | 6,480 | 11.2 |
| Commercial real estate nonresidential | 11,381 | 72 | 0 | 4 | 11,457 | 19.8 |
| Dealer floorplans | 551 | (44) | 0 | 0 | 507 | 0.9 |
| Commercial other | 3,936 | 220 | (551) | 106 | 3,711 | 6.4 |
| Real estate mortgage | 12,322 | 630 | (2) | 3 | 12,953 | 22.4 |
| Home equity | 1,309 | 298 | (7) | 4 | 1,604 | 2.8 |
| Consumer direct | 2,127 | 104 | (199) | 99 | 2,131 | 3.7 |
| Consumer indirect | 13,682 | 470 | (1,728) | 954 | 13,378 | 23.1 |
| Total ACL | $56,961 | $(2,528) | $57,825 | % |
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Six Months Ended June 30, 2025
| ($ in thousands) | Beginning Balance | Provision Charged to Expense | Losses Charged Off | Recoveries | Ending Balance | % of Total ACL |
|---|---|---|---|---|---|---|
| ACL | ||||||
| Hotel/motel | $5,208 | $396 | $0 | $0 | $5,604 | 9.7% |
| Commercial real estate residential | 5,467 | 1,062 | (59) | 10 | 6,480 | 11.2 |
| Commercial real estate nonresidential | 10,307 | 1,144 | (2) | 8 | 11,457 | 19.8 |
| Dealer floorplans | 682 | (175) | 0 | 0 | 507 | 0.9 |
| Commercial other | 3,832 | 648 | (955) | 186 | 3,711 | 6.4 |
| Real estate mortgage | 12,504 | 514 | (80) | 15 | 12,953 | 22.4 |
| Home equity | 1,499 | 99 | (7) | 13 | 1,604 | 2.8 |
| Consumer direct | 2,221 | 197 | (467) | 180 | 2,131 | 3.7 |
| Consumer indirect | 13,248 | 1,900 | (3,680) | 1,910 | 13,378 | 23.1 |
| Total ACL | $54,968 | $(5,250) | $57,825 | % |
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 is presented below.
Three Months Ended June 30, 2026
| (in thousands) | Beginning Balance | Provision Charged to Expense | Losses Charged Off | Recoveries | Ending Balance |
|---|---|---|---|---|---|
| ACL for unfunded commitments: | |||||
| Commercial | $832 | $144 | $0 | $0 | $976 |
| Real estate mortgage | 260 | 18 | 0 | 0 | 278 |
| Consumer | 18 | 12 | 0 | 0 | 30 |
| Total unfunded commitment off-balance sheet credit exposure | $1,110 | $174 | $0 | $0 | $1,284 |
Six Months Ended June 30, 2026
| (in thousands) | Beginning Balance | Provision Charged to Expense | Losses Charged Off | Recoveries | Ending Balance |
|---|---|---|---|---|---|
| ACL for unfunded commitments: | |||||
| Commercial | $950 | $26 | $0 | $0 | $976 |
| Real estate mortgage | 298 | (20) | 0 | 0 | 278 |
| Consumer | 21 | 9 | 0 | 0 | 30 |
| Total unfunded commitment off-balance sheet credit exposure | $1,269 | $15 | $0 | $0 | $1,284 |
14
Three Months Ended June 30, 2025
| (in thousands) | Beginning Balance | Provision Charged to Expense | Losses Charged Off | Recoveries | Ending Balance |
|---|---|---|---|---|---|
| ACL for unfunded commitments: | |||||
| Commercial | $1,071 | $(172) | $0 | $0 | $899 |
| Real estate mortgage | 372 | 48 | 0 | 0 | 420 |
| Consumer | 22 | 1 | 0 | 0 | 23 |
| Total unfunded commitment off-balance sheet credit exposure | $1,465 | $(123) | $0 | $0 | $1,342 |
Six Months Ended June 30, 2025
| (in thousands) | Beginning Balance | Provision Charged to Expense | Losses Charged Off | Recoveries | Ending Balance |
|---|---|---|---|---|---|
| ACL for unfunded commitments: | |||||
| Commercial | $1,071 | $(172) | $0 | $0 | $899 |
| Real estate mortgage | 372 | 48 | 0 | 0 | 420 |
| Consumer | 22 | 1 | 0 | 0 | 23 |
| Total unfunded commitment off-balance sheet credit exposure | $1,465 | $(123) | $0 | $0 | $1,342 |
Nonperforming loans
Nonaccrual loans and loans 90 days past due and still accruing, segregated by loan segment, were as follows:
June 30, 2026
| (in thousands) | Nonaccrual Loans with No ACL | Nonaccrual Loans with ACL | 90+ and Still Accruing | Total Nonperforming Loans |
| Commercial real estate residential | $0 | $917 | $1,700 | 2,617 |
| Commercial real estate nonresidential | 83 | 3,699 | 1,361 | 5,143 |
| Commercial other | 33 | 1,792 | 8,816 | 10,641 |
| Total commercial loans | 116 | 6,408 | 11,877 | 18,401 |
| Real estate mortgage | 0 | 4,063 | 5,575 | 9,638 |
| Home equity lines | 0 | 207 | 747 | 954 |
| Total residential loans | 0 | 4,270 | 6,322 | 10,592 |
| Consumer direct | 0 | 0 | 132 | 132 |
| Consumer indirect | 0 | 0 | 620 | 620 |
| Total consumer loans | 0 | 0 | 752 | 752 |
| Loans and lease financing | $116 | $10,678 |
15
December 31, 2025
| (in thousands) | Nonaccrual Loans with No ACL | Nonaccrual Loans with ACL | 90+ and Still Accruing | Total Nonperforming Loans |
| Commercial real estate residential | $0 | $867 | $2,085 | 2,952 |
| Commercial real estate nonresidential | 86 | 2,972 | 1,187 | 4,245 |
| Commercial other | 26 | 896 | 901 | 1,823 |
| Total commercial loans | 112 | 4,735 | 4,173 | 9,020 |
| Real estate mortgage | 0 | 3,429 | 5,098 | 8,527 |
| Home equity lines | 0 | 263 | 624 | 887 |
| Total residential loans | 0 | 3,692 | 5,722 | 9,414 |
| Consumer direct | 0 | 0 | 51 | 51 |
| Consumer indirect | 0 | 0 | 677 | 677 |
| Total consumer loans | 0 | 0 | 728 | 728 |
| Loans and lease financing | $112 | $8,427 |
Interest income recognized on nonaccrual loans for the three and six months ended June 30, 2026 and for the year ended December 31, 2025 totaled thousand, thousand, and thousand, respectively.
The following tables present CTBI’s loan portfolio aging analysis, segregated by loan segment (including loans 90 days past due and still accruing):
June 30, 2026
| (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 | $528,697 | 528,697 |
| Commercial real estate residential | 990 | 394 | 1,876 | 3,260 | 596,194 | 599,454 |
| Commercial real estate nonresidential | 2,966 | 1,148 | 3,848 | 7,962 | 997,500 | 1,005,462 |
| Dealer floorplans | 0 | 0 | 0 | 0 | 79,821 | 79,821 |
| Commercial other | 962 | 578 | 9,805 | 11,345 | 372,735 | 384,080 |
| Total commercial loans | 4,918 | 2,120 | 15,529 | 22,567 | 2,574,947 | 2,597,514 |
| Real estate mortgage | 1,683 | 4,072 | 8,551 | 14,306 | 1,274,851 | 1,289,157 |
| Home equity lines | 1,843 | 860 | 829 | 3,532 | 191,738 | 195,270 |
| Total residential loans | 3,526 | 4,932 | 9,380 | 17,838 | 1,466,589 | 1,484,427 |
| Consumer direct | 550 | 207 | 132 | 889 | 138,976 | 139,865 |
| Consumer indirect | 4,008 | 1,219 | 620 | 5,847 | 897,278 | 903,125 |
| Total consumer loans | 4,558 | 1,426 | 752 | 6,736 | 1,036,254 | 1,042,990 |
| Loans and lease financing | $13,002 | $8,478 | $25,661 | $47,141 | $5,077,790 |
16
December 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 | $497,764 | 497,764 |
| Commercial real estate residential | 216 | 282 | 2,262 | 2,760 | 577,892 | 580,652 |
| Commercial real estate nonresidential | 2,010 | 2,814 | 4,005 | 8,829 | 951,086 | 959,915 |
| Dealer floorplans | 0 | 0 | 0 | 0 | 83,812 | 83,812 |
| Commercial other | 830 | 87 | 1,548 | 2,465 | 368,667 | 371,132 |
| Total commercial loans | 3,056 | 3,183 | 7,815 | 14,054 | 2,479,221 | 2,493,275 |
| Real estate mortgage | 2,543 | 4,063 | 7,594 | 14,200 | 1,192,620 | 1,206,820 |
| Home equity lines | 1,435 | 451 | 644 | 2,530 | 184,268 | 186,798 |
| Total residential loans | 3,978 | 4,514 | 8,238 | 16,730 | 1,376,888 | 1,393,618 |
| Consumer direct | 1,203 | 377 | 51 | 1,631 | 143,960 | 145,591 |
| Consumer indirect | 3,767 | 962 | 677 | 5,406 | 857,052 | 862,458 |
| Total consumer loans | 4,970 | 1,339 | 728 | 7,037 | 1,001,012 | 1,008,049 |
| Loans and lease financing | $12,004 | $9,036 | $16,781 | $37,821 | $4,857,121 |
Credit Quality Indicators and Profile
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.
17
➢ 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 June 30, 2026
| (in thousands) | 2026 | 2025 | 2024 | 2023 | 2022 | Prior | Revolving Loans | Total |
|---|---|---|---|---|---|---|---|---|
| Hotel/motel | ||||||||
| Risk rating: | ||||||||
| Pass | $58,883 | $81,909 | $57,804 | $71,391 | $109,300 | $99,598 | $4,169 | $483,054 |
| Watch | 0 | 0 | 0 | 1,987 | 18,433 | 14,059 | 0 | 34,479 |
| OAEM | 0 | 0 | 0 | 0 | 0 | 6,664 | 0 | 6,664 |
| Substandard | 0 | 0 | 728 | 0 | 3,772 | 0 | 0 | 4,500 |
| Doubtful | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Total hotel/motel | 58,883 | 81,909 | 58,532 | 73,378 | 131,505 | 120,321 | 4,169 | 528,697 |
| Hotel/motel year-to-date gross charge-offs | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Commercial real estate residential | ||||||||
| Risk rating: | ||||||||
| Pass | 71,476 | 147,885 | 93,267 | 85,786 | 59,739 | 84,332 | 26,570 | 569,055 |
| Watch | 5,092 | 2,678 | 911 | 4,184 | 557 | 9,125 | 532 | 23,079 |
| OAEM | 0 | 0 | 0 | 0 | 0 | 48 | 0 | 48 |
| Substandard | 1,122 | 692 | 480 | 413 | 349 | 4,216 | 0 | 7,272 |
| Doubtful | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Total commercial real estate residential | 77,690 | 151,255 | 94,658 | 90,383 | 60,645 | 97,721 | 27,102 | 599,454 |
| Commercial real estate residential year-to-date gross charge-offs | 0 | 0 | 0 | 0 | 0 | (7) | 0 | (7) |
| Commercial real estate nonresidential |
| Risk rating: | ||||||||
|---|---|---|---|---|---|---|---|---|
| Pass | 121,723 | 179,496 | 129,023 | 79,736 | 101,263 | 246,466 | 64,222 | 921,929 |
| Watch | 761 | 4,758 | 6,830 | 10,043 | 6,150 | 24,074 | 1,036 | 53,652 |
| OAEM | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Substandard | 8,835 | 1,776 | 458 | 1,761 | 2,419 | 14,441 | 191 | 29,881 |
| Doubtful | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Total commercial real estate nonresidential | 131,319 | 186,030 | 136,311 | 91,540 | 109,832 | 284,981 | 65,449 | 1,005,462 |
| Commercial real estate nonresidential year-to-date gross charge-offs | 0 | 0 | (4) | (79) | 0 | (1) | 0 | (84) |
| Dealer floorplans | ||||||||
| Risk rating: | ||||||||
| Pass | 0 | 0 | 0 | 0 | 0 | 0 | 67,981 | 67,981 |
| Watch | 0 | 0 | 0 | 0 | 0 | 0 | 11,840 | 11,840 |
| 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 | 0 | 0 |
| Total dealer floorplans | 0 | 0 | 0 | 0 | 0 | 0 | 79,821 | 79,821 |
| Dealer floorplans year-to-date gross charge-offs | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Commercial other | ||||||||
| Risk rating: | ||||||||
| Pass | 66,787 | 74,276 | 18,092 | 26,722 | 26,546 | 36,198 | 94,376 | 342,997 |
| Watch | 362 | 1,404 | 3,736 | 473 | 358 | 8,288 | 5,388 | 20,009 |
| OAEM | 0 | 0 | 0 | 0 | 0 | 18 | 0 | 18 |
| Substandard | 1,596 | 10,218 | 1,176 | 2,984 | 377 | 329 | 4,229 | 20,909 |
| Doubtful | 147 | 0 | 0 | 0 | 0 | 0 | 0 | 147 |
| Total commercial other | 68,892 | 85,898 | 23,004 | 30,179 | 27,281 | 44,833 | 103,993 | 384,080 |
| Commercial other year-to-date gross charge-offs | (375) | (303) | (146) | 0 | (22) | (14) | 0 | (860) |
| Commercial loans | ||||||||
| Risk rating: | ||||||||
| Pass | 318,869 | 483,566 | 298,186 | 263,635 | 296,848 | 466,594 | 257,318 | 2,385,016 |
| Watch | 6,215 | 8,840 | 11,477 | 16,687 | 25,498 | 55,546 | 18,796 | 143,059 |
| OAEM | 0 | 0 | 0 | 0 | 0 | 6,730 | 0 | 6,730 |
| Substandard | 11,553 | 12,686 | 2,842 | 5,158 | 6,917 | 18,986 | 4,420 | 62,562 |
| Doubtful | 147 | 0 | 0 | 0 | 0 | 0 | 0 | 147 |
| Total commercial loans | 336,784 | 505,092 | 312,505 | 285,480 | 329,263 | 547,856 | 280,534 | 2,597,514 |
| Total commercial loans year-to-date gross charge-offs | $(375) | $(303) | $(150) | $(79) | $(22) | $(22) | $0 | (951) |
18
Term Loans Amortized Cost Basis by Origination Year As of December 31, 2025
| (in thousands) | 2025 | 2024 | 2023 | 2022 | 2021 | Prior | Revolving Loans | Total |
|---|---|---|---|---|---|---|---|---|
| Hotel/motel | ||||||||
| Risk rating: | ||||||||
| Pass | $83,005 | $58,850 | $79,857 | $116,984 | $24,564 | $86,215 | $5,604 | $455,079 |
| Watch | 0 | 0 | 2,010 | 18,679 | 0 | 11,022 | 0 | 31,711 |
| OAEM | 0 | 0 | 0 | 0 | 6,403 | 0 | 0 | 6,403 |
| Substandard | 0 | 748 | 0 | 3,823 | 0 | 0 | 0 | 4,571 |
| Doubtful | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Total hotel/motel | 83,005 | 59,598 | 81,867 | 139,486 | 30,967 | 97,237 | 5,604 | 497,764 |
| Hotel/motel year-to-date gross charge-offs | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Commercial real estate residential | ||||||||
| Risk rating: | ||||||||
| Pass | 174,717 | 100,517 | 91,321 | 63,970 | 50,454 | 44,689 | 22,447 | 548,115 |
| Watch | 9,182 | 937 | 4,018 | 489 | 3,543 | 5,512 | 174 | 23,855 |
| OAEM | 0 | 0 | 192 | 0 | 0 | 52 | 0 | 244 |
| Substandard | 2,074 | 511 | 490 | 598 | 1,835 | 2,881 | 49 | 8,438 |
| Doubtful | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Total commercial real estate residential | 185,973 | 101,965 | 96,021 | 65,057 | 55,832 | 53,134 | 22,670 | 580,652 |
| Commercial real estate residential year-to-date gross charge-offs | (160) | (18) | (125) | 0 | 0 | (16) | 0 | (319) |
| Commercial real estate nonresidential | ||||||||
| Risk rating: | ||||||||
| Pass | 180,461 | 163,870 | 98,249 | 106,344 | 99,628 | 169,989 | 55,839 | 874,380 |
| Watch | 3,840 | 6,849 | 12,112 | 6,839 | 17,310 | 10,136 | 1,011 | 58,097 |
| OAEM | 0 | 99 | 0 | 0 | 0 | 0 | 0 | 99 |
| Substandard | 3,889 | 431 | 2,127 | 2,390 | 2,379 | 16,122 | 0 | 27,338 |
| Doubtful | 0 | 0 | 0 | 0 | 0 | 1 | 0 | 1 |
| Total commercial real estate nonresidential | 188,190 | 171,249 | 112,488 | 115,573 | 119,317 | 196,248 | 56,850 | 959,915 |
| Commercial real estate nonresidential year-to-date gross charge-offs | 0 | (1,375) | 0 | 0 | 0 | (2) | 0 | (1,377) |
| Dealer floorplans | ||||||||
| Risk rating: | ||||||||
| Pass | 0 | 0 | 0 | 0 | 0 | 0 | 73,240 | 73,240 |
| Watch | 0 | 0 | 0 | 0 | 0 | 0 | 10,293 | 10,293 |
| OAEM | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Substandard | 0 | 0 | 0 | 0 | 0 | 0 | 279 | 279 |
| Doubtful | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Total dealer floorplans | 0 | 0 | 0 | 0 | 0 | 0 | 83,812 | 83,812 |
| Dealer floorplans year-to-date gross charge-offs | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Commercial other |
| Risk rating: | ||||||||
|---|---|---|---|---|---|---|---|---|
| Pass | 97,104 | 37,248 | 35,594 | 29,023 | 21,350 | 19,299 | 86,954 | 326,572 |
| Watch | 1,713 | 1,017 | 813 | 515 | 149 | 419 | 14,035 | 18,661 |
| OAEM | 0 | 0 | 82 | 0 | 7,892 | 18 | 0 | 7,992 |
| Substandard | 11,973 | 1,219 | 3,071 | 466 | 94 | 320 | 657 | 17,800 |
| Doubtful | 107 | 0 | 0 | 0 | 0 | 0 | 0 | 107 |
| Total commercial other | 110,897 | 39,484 | 39,560 | 30,004 | 29,485 | 20,056 | 101,646 | 371,132 |
| Commercial other year-to-date gross charge-offs | (892) | (106) | (260) | (6) | (268) | (145) | 0 | (1,677) |
| Commercial loans | ||||||||
| Risk rating: | ||||||||
| Pass | 535,287 | 360,485 | 305,021 | 316,321 | 195,996 | 320,192 | 244,084 | 2,277,386 |
| Watch | 14,735 | 8,803 | 18,953 | 26,522 | 21,002 | 27,089 | 25,513 | 142,617 |
| OAEM | 0 | 99 | 274 | 0 | 14,295 | 70 | 0 | 14,738 |
| Substandard | 17,936 | 2,909 | 5,688 | 7,277 | 4,308 | 19,323 | 985 | 58,426 |
| Doubtful | 107 | 0 | 0 | 0 | 0 | 1 | 0 | 108 |
| Total commercial loans | $568,065 | $372,296 | $329,936 | $350,120 | $235,601 | $366,675 | $270,582 | 2,493,275 |
| Total commercial loans year-to-date gross charge-offs | $(1,052) | $(1,499) | $(385) | $(6) | $(268) | $(163) | $0 | (3,373) |
19
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 June 30, 2026
| (in thousands) | 2026 | 2025 | 2024 | 2023 | 2022 | Prior | Revolving Loans | Total |
|---|---|---|---|---|---|---|---|---|
| Home equity lines | ||||||||
| Performing | $0 | $0 | $0 | $0 | $0 | $5,811 | $188,505 | $194,316 |
| Nonperforming | 0 | 0 | 0 | 0 | 0 | 278 | 676 | 954 |
| Total home equity lines | 0 | 0 | 0 | 0 | 0 | 6,089 | 189,181 | 195,270 |
| Home equity year-to-date gross charge-offs | 0 | 0 | (11) | 0 | 0 | (3) | 0 | (14) |
| Mortgage loans | ||||||||
| Performing | 159,795 | 288,942 | 154,000 | 151,369 | 116,941 | 408,472 | 0 | 1,279,519 |
| Nonperforming | 670 | 1,529 | 1,125 | 1,839 | 1,187 | 3,288 | 0 | 9,638 |
| Total mortgage loans | 160,465 | 290,471 | 155,125 | 153,208 | 118,128 | 411,760 | 0 | 1,289,157 |
| Mortgage loans year-to-date gross charge-offs | 0 | 0 | 0 | (108) | (74) | (13) | 0 | (195) |
| Residential loans | ||||||||
| Performing | 159,795 | 288,942 | 154,000 | 151,369 | 116,941 | 414,283 | 188,505 | 1,473,835 |
| Nonperforming | 670 | 1,529 | 1,125 | 1,839 | 1,187 | 3,566 | 676 | 10,592 |
| Total residential loans | 160,465 | 290,471 | 155,125 | 153,208 | 118,128 | 417,849 | 189,181 | 1,484,427 |
| Total residential loans year-to-date gross charge-offs | 0 | 0 | (11) | (108) | (74) | (16) | 0 | (209) |
| Consumer direct loans | ||||||||
| Performing | 31,169 | 37,371 | 21,828 | 16,864 | 9,866 | 22,635 | 0 | 139,733 |
| Nonperforming | 5 | 14 | 110 | 0 | 3 | 0 | 0 | 132 |
| Total consumer direct loans | 31,174 | 37,385 | 21,938 | 16,864 | 9,869 | 22,635 | 0 | 139,865 |
| Consumer direct loans year-to-date gross charge-offs | 0 | (172) | (101) | (83) | (18) | (189) | 0 | (563) |
| Consumer indirect loans | ||||||||
| Performing | 234,270 | 289,925 | 174,027 | 115,728 | 63,061 | 25,494 | 0 | 902,505 |
| Nonperforming | 12 | 102 | 86 | 271 | 113 | 36 | 0 | 620 |
| Total consumer indirect loans | 234,282 | 290,027 | 174,113 | 115,999 | 63,174 | 25,530 | 0 | 903,125 |
| Consumer indirect loans year-to-date gross charge-offs | (34) | (596) | (606) | (929) | (717) | (193) | 0 | (3,075) |
| Consumer loans | ||||||||
| Performing | 265,439 | 327,296 | 195,855 | 132,592 | 72,927 | 48,129 | 0 | 1,042,238 |
| Nonperforming | 17 | 116 | 196 | 271 | 116 | 36 | 0 | 752 |
| Total consumer loans | 265,456 | 327,412 | 196,051 | 132,863 | 73,043 | 48,165 | 0 | 1,042,990 |
| Total consumer loans year-to-date gross charge-offs | $(34) | $(768) | $(707) | $(1,012) | $(735) | $(382) | $0 | $(3,638) |
20
Term Loans Amortized Cost Basis by Origination Year As of December 31, 2025
| (in thousands) | 2025 | 2024 | 2023 | 2022 | 2021 | Prior | Revolving Loans | Total |
|---|---|---|---|---|---|---|---|---|
| Home equity lines | ||||||||
| Performing | $0 | $0 | $0 | $0 | $0 | $5,744 | $180,167 | $185,911 |
| Nonperforming | 0 | 0 | 0 | 0 | 0 | 221 | 666 | 887 |
| Total home equity lines | 0 | 0 | 0 | 0 | 0 | 5,965 | 180,833 | 186,798 |
| Home equity year-to-date gross charge-offs | 0 | 0 | 0 | 0 | 0 | (9) | 0 | (9) |
| Mortgage loans | ||||||||
| Performing | 299,236 | 173,336 | 168,206 | 123,839 | 132,923 | 300,753 | 0 | 1,198,293 |
| Nonperforming | 708 | 1,387 | 1,213 | 1,905 | 547 | 2,767 | 0 | 8,527 |
| Total mortgage loans | 299,944 | 174,723 | 169,419 | 125,744 | 133,470 | 303,520 | 0 | 1,206,820 |
| Mortgage loans year-to-date gross charge-offs | 0 | 0 | 0 | (37) | (16) | (189) | 0 | (242) |
| Residential loans | ||||||||
| Performing | 299,236 | 173,336 | 168,206 | 123,839 | 132,923 | 306,497 | 180,167 | 1,384,204 |
| Nonperforming | 708 | 1,387 | 1,213 | 1,905 | 547 | 2,988 | 666 | 9,414 |
| Total residential loans | $299,944 | $174,723 | $169,419 | $125,744 | $133,470 | $309,485 | $180,833 | $1,393,618 |
| Total residential loans year-to-date gross charge-offs | $0 | $0 | $0 | $(37) | $(16) | $(198) | $0 | $(251) |
| Consumer direct loans | ||||||||
| Performing | $54,669 | $28,377 | $21,704 | $12,833 | $11,667 | $16,290 | $0 | $145,540 |
| Nonperforming | 22 | 0 | 29 | 0 | 0 | 0 | 0 | 51 |
| Total consumer direct loans | 54,691 | 28,377 | 21,733 | 12,833 | 11,667 | 16,290 | 0 | 145,591 |
| Consumer direct loans year-to-date gross charge-offs | (69) | (291) | (292) | (202) | (55) | (60) | 0 | (969) |
| Consumer indirect loans |
| Performing | 356,525 | 219,121 | 151,128 | 90,077 | 30,999 | 13,931 | 0 | 861,781 |
|---|---|---|---|---|---|---|---|---|
| Nonperforming | 83 | 104 | 233 | 122 | 107 | 28 | 0 | 677 |
| Total consumer indirect loans | 356,608 | 219,225 | 151,361 | 90,199 | 31,106 | 13,959 | 0 | 862,458 |
| Consumer indirect loans year-to-date gross charge-offs | (245) | (1,563) | (3,283) | (1,849) | (503) | (260) | 0 | (7,703) |
| Consumer loans | ||||||||
| Performing | 411,194 | 247,498 | 172,832 | 102,910 | 42,666 | 30,221 | 0 | 1,007,321 |
| Nonperforming | 105 | 104 | 262 | 122 | 107 | 28 | 0 | 728 |
| Total consumer loans | $411,299 | $247,602 | $173,094 | $103,032 | $42,773 | $30,249 | $0 | 1,008,049 |
| Total consumer loans year-to-date gross charge-offs | $(314) | $(1,854) | $(3,575) | $(2,051) | $(558) | $(320) | $0 | (8,672) |
21
The total of consumer mortgage loans secured by real estate properties for which formal foreclosure proceedings are in process was $3.5 million and $3.1 million at June 30, 2026 and December 31, 2025, respectively.
Individually Evaluated Loans
If a loan does not share risk characteristics with other pooled loans in determining the ACL, the loan is evaluated for expected credit losses on an individual basis. Of the loans that CTBI has individually evaluated, the loans listed below by segment are those that are collateral dependent:
June 30, 2026
| ($ in thousands) | Number of Loans | Recorded Investment | Specific Reserve |
|---|---|---|---|
| Hotel/motel | 2 | $10,076 | $0 |
| Commercial real estate residential | 1 | 1,521 | 0 |
| Commercial real estate nonresidential | 7 | 24,858 | 525 |
| Commercial other | 5 | 13,797 | 0 |
| Total collateral dependent loans | 15 | $50,252 | $525 |
December 31, 2025
| ($ in thousands) | Number of Loans | Recorded Investment | Specific Reserve |
|---|---|---|---|
| Hotel/motel | 2 | $9,861 | $0 |
| Commercial real estate residential | 1 | 1,521 | 0 |
| Commercial real estate nonresidential | 6 | 17,094 | 725 |
| Commercial other | 4 | 19,191 | 0 |
| Total collateral dependent loans | 13 | $47,667 | $725 |
Based on the quarterly evaluation of losses for these credits, the combined amount of expected loss at June 30, 2026 is $0.5 million. This expected loss is tied to two unrelated loans that demonstrate a shortfall in collateral which is insufficient to repay the principal balance of the loans in the event of a liquidation of the collateral and after estimated selling costs. All other evaluated credits show sufficient collateral to repay the entire loan balances after estimated selling costs. The hotel/motel, commercial real estate residential, and commercial real estate nonresidential segments are all collateralized with real estate. The four loans listed in the commercial other segment at June 30, 2026 are collateralized by inventory, equipment, and accounts receivable. One evaluated credit is an ACH commitment that is unsecured, but it has no balance outstanding.
22
Loan Modifications
Certain loans have been modified where the customer is facing financial difficulty and economic concessions were granted to borrowers, consisting of reductions in the interest rates, payment extensions, forgiveness of principal, and forbearances.
These loans, segregated by loan segment and concession granted, are presented below for the quarter ended June 30, 2026:
Amortized Cost at June 30, 2026
| ($ in thousands) | Interest Rate Reduction | % of total | Term Extension | % of total |
|---|---|---|---|---|
| Commercial real estate nonresidential | $7,253 | 0.72% | $296 | 0.03% |
| Commercial other | 0 | 0.00 | 357 | 0.09 |
| Commercial loans | 7,253 | 0.28 | 653 | 0.03 |
| Real estate mortgage | 535 | 0.04 | 3,964 | 0.31 |
| Residential loans | 535 | 0.04 | 3,964 | 0.27 |
| Consumer direct | 0 | 0.00 | 73 | 0.05 |
| Consumer indirect | 0 | 0.00 | 54 | 0.01 |
| Consumer loans | 0 | 0.00 | 127 | 0.01 |
| Loans and lease financing | $7,788 | 0.15% | $4,744 | 0.09% |
Amortized Cost at June 30, 2026
| ($ in thousands) | Combination – Term Extension and Interest Rate Reduction | % of total | Payment Change | % of total |
|---|---|---|---|---|
| Commercial real estate residential | $40 | 0.01% | $0 | 0.00% |
| Commercial real estate nonresidential | 0 | 0.00 | 368 | 0.04 |
| Commercial other | 295 | 0.08 | 311 | 0.08 |
| Commercial loans | 335 | 0.01 | 679 | 0.03 |
| Real estate mortgage | 431 | 0.03 | 0 | 0.00 |
| Home equity lines | 169 | 0.09 | 0 | 0.00 |
| Residential loans | 600 | 0.04 | 0 | 0.00 |
| Consumer indirect | 0 | 0.00 | 21 | 0.00 |
| Consumer loans | 0 | 0.00 | 21 | 0.00 |
| Loans and lease financing | $935 | 0.02% | $700 | 0.01% |
23
Amortized Cost at June 30, 2026
| ($ in thousands) | Combination – Term Extension and Payment Change | % of total | Combination – Interest Rate Reduction and Payment Change | % of total |
|---|---|---|---|---|
| Real estate mortgage | $0 | 0.00% | $487 | 0.04% |
| Residential loans | 0 | 0.00 | 487 | 0.03 |
| Consumer indirect | 48 | 0.01 | 0 | 0.00 |
| Consumer loans | 48 | 0.00 | 0 | 0.00 |
| Loans and lease financing | $48 | 0.00% | $487 | 0.01% |
The following tables describe the financial effect of the modifications made to borrowers experiencing financial difficulty for the quarter ended June 30, 2026:
- Loan Type Interest Rate Reduction Financial Impact Term Extension Financial Impact
- Commercial real estate nonresidential Weighted-average contractual interest rate remained at 2.5% Added a weighted-average 5.6 years to life of the loans
- Commercial other Added a weighted-average 1.7 years to life of the loans
- Real estate mortgage Reduced weighted-average contractual interest rate from 5.3% to 3.8% Added a weighted-average 8.8 years to life of the loans
- Consumer direct Added a weighted-average 1.8 years to life of the loans
- Consumer indirect Added a weighted-average 3.0 years to life of the loans
24
- Loan Type Combination – Term Extension and Interest Rate Reduction Financial Impact Payment Changes Financial Impact
- Commercial real estate residential Reduced weighted-average contractual interest rate from 9.8% to 7.8% and increased the weighted-average life by 13.2 years
- Commercial real estate nonresidential Provided payment changes that will be added to the end of the original loan term
- Commercial other Reduced weighted-average contractual interest rate from 8.5% to 7.8% and increased the weighted-average life by 15.3 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 3.5% to 3.0% and increased the weighted-average life by 7.4 years
- Home equity lines Reduced weighted-average contractual interest rate from 8.1% to 6.8% and increased the weighted-average life by 7.9 years
- Consumer indirect Provided payment changes that will be added to the end of the original loan term
- Loan Type Combination – Term Extension and Payment Change Financial Impact Combination – Interest Rate Reduction and Payment Change
- Real estate mortgage Reduced weighted-average contractual interest rate from 7.1% to 4.1% and provided payment changes with any deferred payments added to the end of the loan term.
- Consumer indirect Added a weighted-average 4.2 years to life of the loans and provided payment changes with any deferred payments added to the end of the loan term.
25
These loans, segregated by loan segment and concession granted, are presented below for the six months ended June 30, 2026:
Amortized Cost at June 30, 2026
| ($ in thousands) | Interest Rate Reduction | % of total | Term Extension | % of total |
|---|---|---|---|---|
| Commercial real estate residential | $0 | 0.00% | $28 | 0.00% |
| Commercial real estate nonresidential | 7,253 | 0.72 | 296 | 0.03 |
| Commercial other | 0 | 0.00 | 518 | 0.13 |
| Commercial loans | 7,253 | 0.28 | 842 | 0.03 |
| Real estate mortgage | 1,651 | 0.13 | 5,827 | 0.45 |
| Residential loans | 1,651 | 0.11 | 5,827 | 0.39 |
| Consumer direct | 0 | 0.00 | 73 | 0.05 |
| Consumer indirect | 0 | 0.00 | 133 | 0.01 |
| Consumer loans | 0 | 0.00 | 206 | 0.02 |
| Loans and lease financing | $8,904 | 0.17% | $6,875 | 0.13% |
Amortized Cost at June 30, 2026
| ($ in thousands) | Combination – Term Extension and Interest Rate Reduction | % of total | Payment Change | % of total |
|---|---|---|---|---|
| Commercial real estate residential | $40 | 0.01% | $97 | 0.02% |
| Commercial real estate nonresidential | 0 | 0.00 | 2,731 | 0.27 |
| Commercial other | 321 | 0.08 | 372 | 0.10 |
| Commercial loans | 361 | 0.01 | 3,200 | 0.12 |
| Real estate mortgage | 529 | 0.04 | 0 | 0.00 |
| Home equity lines | 184 | 0.09 | 0 | 0.00 |
| Residential loans | 713 | 0.05 | 0 | 0.00 |
| Consumer indirect | 0 | 0.00 | 21 | 0.00 |
| Consumer loans | 0 | 0.00 | 21 | 0.00 |
| Loans and lease financing | $1,074 | 0.02% | $3,221 | 0.06% |
26
Amortized Cost at June 30, 2026
| ($ in thousands) | Combination – Term Extension and Payment Change | % of total | Combination – Interest Rate Reduction and Payment Change | % of total |
|---|---|---|---|---|
| Commercial real estate residential | $60 | 0.01% | $0 | 0.00% |
| Commercial loans | 60 | 0.00 | 0 | 0.00 |
| Real estate mortgage | 20 | 0.00 | 487 | 0.04 |
| Residential loans | 20 | 0.00 | 487 | 0.03 |
| Consumer indirect | 98 | 0.01 | 0 | 0.00 |
| Consumer loans | 98 | 0.01 | 0 | 0.00 |
| Loans and lease financing | $178 | 0.00% | $487 | 0.01% |
The following tables describe the financial effect of the modifications made to borrowers experiencing financial difficulty for the six months ended June 30, 2026:
- Loan Type Interest Rate Reduction Financial Impact Term Extension Financial Impact
- Commercial real estate residential Added a weighted-average 1.0 years to life of the loans
- Commercial real estate nonresidential Weighted-average contractual interest rate remained at 2.5% Added a weighted-average 1.1 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 5.3% to 3.3% Added a weighted-average 0.4 years to life of the loans
- Consumer direct Added a weighted-average 0.5 years to life of the loans
- Consumer indirect Added a weighted-average 0.5 years to life of the loans
27
- Loan Type Combination – Term Extension and Interest Rate Reduction Financial Impact Payment Changes Financial Impact
- Commercial real estate residential Reduced weighted-average contractual interest rate from 9.8% to 7.8% and increased the weighted-average life by 13.2 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 Reduced weighted-average contractual interest rate from 8.7% to 7.9% and increased the weighted-average life by 7.3 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 3.4% to 3.0% and increased the weighted-average life by 6.8 years
- Home equity lines Reduced weighted-average contractual interest rate from 8.0% to 6.8% and increased the weighted-average life by 3.9 years
- Consumer indirect Provided payment changes that will be added to the end of the original loan term.
- Loan Type Combination – Term Extension and Payment Change Financial Impact Combination – Interest Rate Reduction and Payment Change
- Commercial real estate nonresidential Added a weighted-average 0.3 years to life of the loans and provided payment changes with any deferred payments added to the end of the loan term.
- Real estate mortgage Added a weighted-average 5.0 years to life of the loans and provided payment changes with any deferred payments added to the end of the loan term. Reduced weighted-average contractual interest rate from 7.1% to 4.1% and provided payment changes with any deferred payments added to the end of the loan term.
- Consumer indirect Added a weighted-average 1.7 years to life of the loans and provided payment changes with any deferred payments added to the end of the loan term.
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These loans, segregated by loan segment and concession granted, are presented below for the quarter ended June 30, 2025:
Amortized Cost at June 30, 2025
| ($ in thousands) | Interest Rate Reduction | % of total | Term Extension | % of total |
|---|---|---|---|---|
| Commercial real estate residential | $0 | 0.00% | $299 | 0.05% |
| Commercial real estate nonresidential | 7,254 | 0.79 | 0 | 0.00 |
| Commercial other | 0 | 0.00 | 264 | 0.07 |
| Commercial loans | 7,254 | 0.30 | 563 | 0.02 |
| Real estate mortgage | 57 | 0.01 | 3,007 | 0.27 |
| Home equity lines | 0 | 0.00 | 107 | 0.06 |
| Residential loans | 57 | 0.00 | 3,114 | 0.24 |
| Consumer direct | 0 | 0.00 | 176 | 0.12 |
| Consumer indirect | 0 | 0.00 | 121 | 0.01 |
| Consumer loans | 0 | 0.00 | 297 | 0.03 |
| Loans and lease financing | $7,311 | 0.16% | $3,974 | 0.08% |
Amortized Cost at June 30, 2025
| ($ in thousands) | Combination – Term Extension and Interest Rate Reduction | % of total | Payment Change | % of total |
|---|---|---|---|---|
| Commercial real estate residential | 498 | 0.09 | 0 | 0.00 |
| Commercial real estate nonresidential | 0 | 0.00 | 92 | 0.01 |
| Commercial other | 203 | 0.06 | 29 | 0.01 |
| Commercial loans | 701 | 0.03 | 121 | 0.01 |
| Real estate mortgage | 560 | 0.05 | 35 | 0.00 |
| Home equity lines | 49 | 0.03 | 0 | 0.00 |
| Residential loans | 609 | 0.05 | 35 | 0.00 |
| Consumer indirect | 0 | 0.00 | 51 | 0.01 |
| Consumer loans | 0 | 0.00 | 51 | 0.00 |
| Loans and lease financing | $1,310 | 0.03% | $207 | 0.00% |
29
The following tables describe the financial effect of the modifications made to borrowers experiencing financial difficulty for the quarter ended June 30, 2025:
- Loan Type Interest Rate Reduction Financial Impact Term Extension Financial Impact
- Commercial real estate residential Added a weighted-average 1.0 years to life of the loans
- Commercial real estate nonresidential Reduced weighted-average contractual interest rate from 7.5% to 2.0%
- Commercial other Added a weighted-average 1.9 years to life of the loans
- Real estate mortgage Reduced weighted-average contractual interest rate from 8.2% to 3.8% Added a weighted-average 0.3 years to life of the loans
- Home equity lines Added a weighted-average 4.7 years to life of the loans
- Consumer direct Added a weighted-average 0.3 years to life of the loans
- Consumer indirect Added a weighted-average 0.8 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 Reduced weighted-average contractual interest rate from 9.5% to 8.8% and increased the weighted-average life by 20.0 years
- Commercial real estate nonresidential Provided payment changes that will be added to the end of the original loan term
- Commercial other Reduced weighted-average contractual interest rate from 10.0% to 8.0% and increased the weighted-average life by 0.9 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 5.2% to 3.8% and increased the weighted-average life by 5.7 years Provided payment changes that will be added to the end of the original loan term
- Home Equity Lines Weighted-average contractual interest rate remained at 7.5% and increased the weighted-average life by 4.6 years
- Consumer indirect Provided payment changes that will be added to the end of the original loan term
30
These loans, segregated by loan segment and concession granted, are presented below for the six months ended June 30, 2025:
Amortized Cost at June 30, 2025
| ($ in thousands) | Interest Rate Reduction | % of total | Term Extension | % of total |
|---|---|---|---|---|
| Commercial real estate residential | $0 | 0.00% | $299 | 0.05% |
| Commercial real estate nonresidential | 7,382 | 0.81 | 2,466 | 0.27 |
| Commercial other | 0 | 0.00 | 1,260 | 0.35 |
| Commercial loans | 7,382 | 0.31 | 4,025 | 0.17 |
| Real estate mortgage | 374 | 0.03 | 5,137 | 0.46 |
| Home equity lines | 0 | 0.00 | 321 | 0.18 |
| Residential loans | 374 | 0.03 | 5,458 | 0.42 |
| Consumer direct | 0 | 0.00 | 223 | 0.15 |
| Consumer indirect | 0 | 0.00 | 286 | 0.03 |
| Consumer loans | 0 | 0.00 | 509 | 0.05 |
| Loans and lease financing | $7,756 | 0.16% | $9,992 | 0.21% |
Amortized Cost at June 30, 2025
| ($ in thousands) | Combination – Term Extension and Interest Rate Reduction | % of total | Payment Change | % of total |
|---|---|---|---|---|
| Commercial real estate residential | $975 | 0% | $0 | 0.00% |
| Commercial real estate nonresidential | 0 | 0.00 | 351 | 0.04 |
| Commercial other | 562 | 0.16 | 539 | 0.15 |
| Commercial loans | 1,537 | 0.06 | 890 | 0.04 |
| Real estate mortgage | 613 | 0.06 | 35 | 0.00 |
| Home equity lines | 50 | 0.03 | 0 | 0.00 |
| Residential loans | 663 | 0.05 | 35 | 0.00 |
| Consumer indirect | 0 | 0.00 | 155 | 0.02 |
| Consumer loans | 0 | 0.00 | 155 | 0.02 |
| Loans and lease financing | $2,200 | 0.05% | $1,080 | 0.02% |
31
The following tables describe the financial effect of the modifications made to borrowers experiencing financial difficulty for the six months ended June 30, 2025:
- Loan Type Interest Rate Reduction Financial Impact Term Extension Financial Impact
- Commercial real estate residential Added a weighted-average 1.0 years to life of the loans
- Commercial real estate nonresidential Reduced weighted-average contractual interest rate from 7.5% to 2.1% Added a weighted-average 0.5 years to life of the loans
- Commercial other Added a weighted-average 4.2 years to life of the loans
- Real estate mortgage Reduced weighted-average contractual interest rate from 7.8% to 4.4% Added a weighted-average 0.4 years to life of the loans
- Home equity lines Added a weighted-average 2.9 years to life of the loans
- Consumer direct Added a weighted-average 0.3 years to life of the loans
- Consumer indirect Added a weighted-average 0.9 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 Reduced weighted-average contractual interest rate from 9.2% to 8.2% and increased the weighted-average life by 16.0 years
- 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 6.5% to 8.0% and increased the weighted-average life by 6.5 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 5.3% to 3.7% and increased the weighted-average life by 5.3 years Provided payment changes that will be added to the end of the original loan term.
- Home equity lines Weighted-average contractual interest rate remained at 7.5% and increased the weighted-average life by 4.6 years
- Consumer indirect Provided payment changes that will be added to the end of the original loan term.
No charge-offs have resulted from the presented modifications. We had commitments to extend additional credit in the amount of thousand at June 30, 2026, and commitments to extend additional credit at June 30, 2025, on loans that were considered in financial difficulty.
32
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 June 30, 2026.
| Line item | Past Due Status (Amortized Cost Basis) | Past Due Status (Amortized Cost Basis) | Past Due Status (Amortized Cost Basis) | Past Due Status (Amortized Cost Basis) | Past Due Status (Amortized Cost Basis) |
|---|---|---|---|---|---|
| (in thousands) | Current | 30-89 Days | 90+ Days | Nonaccrual | |
| Commercial real estate residential | $324 | $0 | $0 | 0 | |
| Commercial real estate nonresidential | 11,179 | 178 | 0 | 0 | |
| Commercial other | 1,160 | 0 | 0 | 302 | |
| Real estate mortgage | 11,557 | 1,233 | 834 | 355 | |
| Home equity lines | 425 | 0 | 66 | 0 | |
| Consumer direct | 86 | 4 | 0 | 0 | |
| Consumer indirect | 496 | 21 | 0 | 0 | |
| Loans to borrowers experiencing financial difficulty | $25,227 | $1,436 | $900 |
The allowance for credit losses may be increased, adjustments may be made in the allocation of the allowance, or partial charge-offs may be taken to further write-down the carrying value of the loan. During the quarter ended June 30, 2026, there were loans to borrowers experiencing financial difficulty that subsequently defaulted. CTBI considers a loan in default when it is 90 days or more past due or transferred to nonaccrual. Presented below, segregated by segment, are loans to borrowers experiencing financial difficulty for which there was a payment default during the periods indicated and such default was within 12 months of the loan modification.
Three Months Ended June 30, 2026
| ($ in thousands) | Number of Loans | Recorded Balance |
|---|---|---|
| Commercial other | 2 | $157 |
| Real estate mortgage | 4 | 421 |
| Home equity lines | 1 | 66 |
| Loans to borrowers experiencing financial difficulty |
Six Months Ended June 30, 2026
| ($ in thousands) | Number of Loans | Recorded Balance |
|---|---|---|
| Commercial other | 2 | $157 |
| Real estate mortgage | 6 | 546 |
| Home equity lines | 1 | 66 |
| Loans to borrowers experiencing financial difficulty |
Three Months Ended June 30, 2025
| ($ in thousands) | Number of Loans | Recorded Balance |
|---|---|---|
| Commercial other | 1 | $95 |
| Real estate mortgage | 1 | 33 |
| Loans to borrowers experiencing financial difficulty |
33
Six Months Ended June 30, 2025
| ($ in thousands) | Number of Loans | Recorded Balance |
|---|---|---|
| Commercial real estate residential | 1 | $18 |
| Commercial other | 2 | 338 |
| Real estate mortgage | 2 | 82 |
| Loans to borrowers experiencing financial difficulty |
Note 4 – 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:
| (in thousands) | Balance Outstanding at Period End | Average Balance Outstanding For the Quarter Ended | Maximum Balance Outstanding During the Quarter Ended |
|---|---|---|---|
| June 30, 2026 | $297,094 | $300,828 | $301,457 |
| December 31, 2025 | $308,799 | $291,512 | $308,799 |
| June 30, 2025 | $225,075 | $233,206 | $230,898 |
At June 30, 2026 and December 31, 2025, we had amounts at risk under repurchase agreements for one customer exceeding 10% of shareholders’ equity with a balance of $148.0 million at each period end and weighted average maturities of 5.0 months and 4.6 months, respectively.
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 $368.1 million and $358.1 million at June 30, 2026 and December 31, 2025, 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 is presented in the following tables:
June 30, 2026
| 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 | $6,098 | $9,872 | $0 | $1,180 | 17,150 |
| State and political subdivisions | 96,726 | 4,189 | 1,282 | 11,110 | 113,307 |
| Agency mortgage-backed securities | 54,941 | 13,087 | 29,568 | 61,161 | 158,757 |
| Asset-backed securities | 4,028 | 3,852 | 0 | 0 | 7,880 |
| Total repurchase agreements | $161,793 | $31,000 | $30,850 | $73,451 | 297,094 |
34
December 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 | $18,035 | $7 | $1,404 | $10,042 | 29,488 |
| State and political subdivisions | 113,867 | 493 | 9,878 | 6,936 | 131,174 |
| Agency mortgage-backed securities | 36,373 | 0 | 31,020 | 65,272 | 132,665 |
| Asset-backed securities | 4,377 | 0 | 6,998 | 4,097 | 15,472 |
| Total repurchase agreements | $172,652 | $500 | $49,300 | $86,347 | 308,799 |
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.
| (in thousands)June 30, 2026: | Gross Amount of Recognized Liabilities | Gross Amount Offset in the Balance Sheet | Net Amount of Liabilities Presented in the Balance Sheet | Gross Amount Not Offset in the Balance SheetFinancial Instruments Posted as Collateral | Gross Amount Not Offset in the Balance SheetCash Posted as Collateral | Net Amount |
|---|---|---|---|---|---|---|
| Repurchase agreements | $297,094 | $0 | $297,094 | $(297,094) | $0 | $0 |
| December 31, 2025: | ||||||
| Repurchase agreements | $308,799 | $0 | $308,799 | $(308,799) | $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 2 above for the total fair value of financial instruments pledged as collateral for repurchase agreements.
Note 5 – Fair Value of Financial Assets and Liabilities
Fair Value Measurements
Fair value is defined as the price that would be received upon sale of an asset or the price paid to transfer a liability, in an orderly transaction between market participants at the measurement date (i.e., the “exit price”). CTBI uses a fair value hierarchy that prioritizes the inputs used in valuation techniques to measure fair value into three broad levels. The following is a brief description of each level:
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.
35
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 and indicate the level within the fair value hierarchy of the valuation techniques.
| (in thousands) | Fair Value | Fair Value Measurements at June 30, 2026 UsingQuoted Prices in Active Markets for Identical Assets (Level 1) | Fair Value Measurements at June 30, 2026 UsingSignificant Other Observable Inputs (Level 2) | Fair Value Measurements at June 30, 2026 UsingSignificant Unobservable Inputs (Level 3) |
|---|---|---|---|---|
| Assets measured – recurring basis | ||||
| Available-for-sale securities: | ||||
| U.S. Treasury and government agencies | $147,306 | $0 | $147,306 | $0 |
| State and political subdivisions | 247,985 | 0 | 247,985 | 0 |
| Agency mortgage-backed securities | 641,337 | 0 | 641,337 | 0 |
| Asset-backed securities | 15,053 | 0 | 15,053 | 0 |
| Equity securities at fair value | 4,578 | 0 | 0 | 4,578 |
| Mortgage servicing rights | 6,759 | 0 | 0 | 6,759 |
| (in thousands) | Fair Value | Fair Value Measurements at December 31, 2025 UsingQuoted Prices in Active Markets for Identical Assets (Level 1) | Fair Value Measurements at December 31, 2025 UsingSignificant Other Observable Inputs (Level 2) | Fair Value Measurements at December 31, 2025 UsingSignificant Unobservable Inputs (Level 3) |
|---|---|---|---|---|
| Assets measured – recurring basis | ||||
| Available-for-sale securities: | ||||
| U.S. Treasury and government agencies | $235,759 | $0 | $235,759 | $0 |
| State and political subdivisions | 266,891 | 0 | 266,891 | 0 |
| Agency mortgage-backed securities | 588,262 | 0 | 588,262 | 0 |
| Asset-backed securities | 29,807 | 0 | 29,807 | 0 |
| Equity securities at fair value | 4,154 | 0 | 0 | 4,154 |
| Mortgage servicing rights | 6,751 | 0 | 0 | 6,751 |
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 June 30, 2026 and December 31, 2025. There have been no significant changes in the valuation techniques during the six months ended June 30, 2026 or the year ended December 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.
36
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
If quoted market prices are not available, 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.
- Equity Securities at Fair Value
Fair value for equity securities is derived based on unobservable inputs, such as the discount rate, quarterly dividends payable to the Visa Class B-3 and Class C common stock, and the prevailing conversion rate at the conversion date. The most recent conversion rate for Class B-3 common stock of 1.4953 and the most recent dividend rate of 1.0019 were used to derive the fair value estimate for Class B-3. The most recent conversion rate for Class C common stock of 4.0000 and the most recent dividend rate of 2.68 were used to derive the fair value estimate for Class C. 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
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, mortgage servicing rights (“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.
37
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:
| (in thousands) | Three Months Ended June 30 · 2026Equity Securities at Fair Value | Three Months Ended June 30 · 2026Mortgage Servicing Rights | Three Months Ended June 30 · 2025Equity Securities at Fair Value | Three Months Ended June 30 · 2025Mortgage Servicing Rights |
|---|---|---|---|---|
| Beginning balance | $3,666 | $6,728 | $4,261 | $7,093 |
| Total unrealized gains | ||||
| Included in net income | 912 | 201 | 149 | 157 |
| Issues | 0 | 24 | 0 | 30 |
| Settlements | 0 | (194) | 0 | (184) |
| Ending balance | $4,578 | $6,759 | $4,410 | $7,096 |
| Total gains 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 | $912 | $201 | $149 | $157 |
| (in thousands) | Six Months Ended June 30 · 2026Equity Securities at Fair Value | Six Months Ended June 30 · 2026Mortgage Servicing Rights | Six Months Ended June 30 · 2025Equity Securities at Fair Value | Six Months Ended June 30 · 2025Mortgage Servicing Rights |
|---|---|---|---|---|
| Beginning balance | $4,154 | $6,751 | $3,781 | $7,357 |
| Total unrealized gains | ||||
| Included in net income | 424 | 347 | 629 | 44 |
| Issues | 0 | 46 | 0 | 50 |
| Settlements | 0 | (385) | 0 | (355) |
| Ending balance | $4,578 | $6,759 | $4,410 | $7,096 |
| Total gains 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 | $424 | $347 | $629 | $44 |
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(in thousands) | Three Months Ended · June 302026 | Three Months Ended · June 302025 | Six Months Ended · June 302026 | Six Months Ended · June 302025 |
|---|---|---|---|---|
| Total gains |
38
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 and indicate the level within the fair value hierarchy of the valuation techniques.
| (in thousands) | Fair Value | Fair Value Measurements at June 30, 2026 UsingQuoted Prices in Active Markets for Identical Assets (Level 1) | Fair Value Measurements at June 30, 2026 UsingSignificant Other Observable Inputs (Level 2) | Fair Value Measurements at June 30, 2026 UsingSignificant Unobservable Inputs (Level 3) |
|---|---|---|---|---|
| Assets measured – nonrecurring basis | ||||
| Collateral dependent loans | $7,253 | $0 | $0 | $7,253 |
| Other real estate owned | 164 | 0 | 0 | 164 |
| (in thousands) | Fair Value | Fair Value Measurements at December 31, 2025 UsingQuoted Prices in Active Markets for Identical Assets (Level 1) | Fair Value Measurements at December 31, 2025 UsingSignificant Other Observable Inputs (Level 2) | Fair Value Measurements at December 31, 2025 UsingSignificant Unobservable Inputs (Level 3) |
|---|---|---|---|---|
| Assets measured – nonrecurring basis | ||||
| Collateral dependent loans | $697 | $0 | $0 | $697 |
| Other real estate owned | 13 | 0 | 0 | 13 |
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.
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. 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. Fair value adjustment to collateral-dependent loans during the three and six months ended June 30, 2026 reflected an improvement of $0.2 million with the additional collateral of the fair valued loan. Fair value adjustments for the year ended December 31, 2025 were $0.4 million.
39
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. Fair value adjustments to OREO disclosed above for the three and six months ended June 30, 2026 were $15 thousand. Fair value adjustments to OREO disclosed above for the year ended December 31, 2025 were $38 thousand.
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. Unobservable inputs for OREO were weighted by estimated cost to sell. There were no transfers in or out of Level 3 during the six months ended June 30, 2026. The following tables present quantitative information about unobservable inputs used in recurring and nonrecurring Level 3 fair value measurements for the periods indicated.
| (in thousands) | Quantitative Information about Level 3 Fair Value MeasurementsFair Value at June 30, 2026 | Quantitative Information about Level 3 Fair Value MeasurementsValuation Technique(s) | Quantitative Information about Level 3 Fair Value MeasurementsUnobservable Input | Quantitative Information about Level 3 Fair Value MeasurementsRange (Weighted Average) |
|---|---|---|---|---|
| Equity securities at fair value | $4,578 | Discounted cash flows | Discount rate | 8.0% - 12.0% (10.0%) |
| Conversion date | Dec 2027 - Dec 2029 (Dec 2028) | |||
| Mortgage servicing rights | $6,759 | Discounted cash flows | Constant prepayment rate | 5.5% - 25.0% (6.2%) |
| Cost to service | $66 - $517 ($77) | |||
| Probability of default | 0.0% - 100.0% (1.3%) | |||
| Discount rate | 9.0% - 13.6% (9.4%) | |||
| Collateral-dependent loans | Market comparable properties | Marketability discount | 0.0% - 0.0% (0.0%) | |
| Other real estate owned | $164 | Market comparable properties | Comparability adjustments | 16.0% - 27.6% (17.4%) |
40
| (in thousands) | Quantitative Information about Level 3 Fair Value MeasurementsFair Value at December 31, 2025 | Quantitative Information about Level 3 Fair Value MeasurementsValuation Technique(s) | Quantitative Information about Level 3 Fair Value MeasurementsUnobservable Input | Quantitative Information about Level 3 Fair Value MeasurementsRange (Weighted Average) |
|---|---|---|---|---|
| Equity securities at fair value | $4,154 | Discounted cash flows | Discount rate | 8.0% - 12.0% (10.0%) |
| Conversion date | Dec 2027 - Dec 2029 (Dec 2028) | |||
| Mortgage servicing rights | $6,751 | Discounted cash flows | Constant prepayment rate | 5.5% - 30.4% (6.5%) |
| Cost to service | $67 - $817 ($77) | |||
| Probability of default | 0.0% - 100.0% (1.5%) | |||
| Discount rate | 9.0% - 11.5% (9.7%) | |||
| Collateral-dependent loans | Market comparable properties | Marketability discount | 24.2% - 24.2% (24.2%) | |
| Other real estate owned | $13 | Market comparable properties | Comparability adjustments | 0.0% - 0.0% (0.0%) |
41
Fair Value of Financial Instruments
The following tables present estimated fair value of CTBI’s financial instruments and indicate the level within the fair value hierarchy of the valuation techniques.
| (in thousands) | Carrying Amount | Fair Value Measurements at June 30, 2026 UsingQuoted Prices in Active Markets for Identical Assets (Level 1) | Fair Value Measurements at June 30, 2026 UsingSignificant Other Observable Inputs (Level 2) | Fair Value Measurements at June 30, 2026 UsingSignificant Unobservable Inputs (Level 3) |
|---|---|---|---|---|
| Financial assets: | ||||
| Cash and cash equivalents | $514,347 | $514,347 | $0 | $0 |
| Certificates of deposit in other banks | 245 | 0 | 245 | 0 |
| Debt securities available-for-sale | 1,051,681 | 0 | 1,051,681 | 0 |
| Equity securities at fair value | 4,578 | 0 | 0 | 4,578 |
| Loans, net | 5,061,930 | 0 | 0 | 5,109,843 |
| Federal Home Loan Bank stock | 5,525 | 0 | 5,525 | 0 |
| Federal Reserve Bank stock | 4,887 | 0 | 4,887 | 0 |
| Mortgage servicing rights | 6,759 | 0 | 0 | 6,759 |
| Accrued interest receivable | 25,820 | 0 | 25,820 | 0 |
| Financial liabilities: | ||||
| Deposits | $5,657,763 | $1,259,364 | $4,178,065 | $0 |
| Repurchase agreements | 297,094 | 0 | 297,155 | 0 |
| Federal funds purchased | 500 | 0 | 500 | 0 |
| Advances from Federal Home Loan Bank | 284 | 0 | 293 | 0 |
| Long-term debt | 63,664 | 0 | 58,903 | 0 |
| Accrued interest payable | 16,420 | 0 | 16,420 | 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 |
42
| (in thousands) | Carrying Amount | Fair Value Measurements at December 31, 2025 UsingQuoted Prices in Active Markets for Identical Assets (Level 1) | Fair Value Measurements at December 31, 2025 UsingSignificant Other Observable Inputs (Level 2) | Fair Value Measurements at December 31, 2025 UsingSignificant Unobservable Inputs (Level 3) |
|---|---|---|---|---|
| Financial assets: | ||||
| Cash and cash equivalents | $363,684 | $363,684 | $0 | $0 |
| Certificates of deposit in other banks | 245 | 0 | 245 | 0 |
| Debt securities available-for-sale | 1,120,719 | 0 | 1,120,719 | 0 |
| Equity securities at fair value | 4,154 | 0 | 0 | 4,154 |
| Loans held for sale | 211 | 214 | 0 | 0 |
| Loans, net | 4,834,773 | 0 | 0 | 4,918,385 |
| Federal Home Loan Bank stock | 5,200 | 0 | 5,200 | 0 |
| Federal Reserve Bank stock | 4,887 | 0 | 4,887 | 0 |
| Mortgage servicing rights | 6,751 | 0 | 0 | 6,751 |
| Accrued interest receivable | 25,957 | 0 | 25,957 | 0 |
| Financial liabilities: | ||||
| Deposits | $5,389,058 | $1,263,243 | $3,896,447 | $0 |
| Repurchase agreements | 308,799 | 0 | 308,769 | 0 |
| Federal funds purchased | 500 | 0 | 500 | 0 |
| Advances from Federal Home Loan Bank | 293 | 0 | 304 | 0 |
| Long-term debt | 63,784 | 0 | 60,483 | 0 |
| Accrued interest payable | 8,535 | 0 | 8,535 | 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 6 – Stock-Based Compensation
There were stock option awards outstanding and unrecognized expense related to stock option grants as of June 30, 2026. Restricted stock expense for the three and six months ended June 30, 2026 was $475 thousand and $978 thousand, respectively, including $52 thousand and $105 thousand, respectively, in dividends paid during those periods. As of June 30, 2026, there was a total of $3.7 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 3.0 years.
The following table shows restricted stock activity for the periods indicated.
| Line item | Three Months Ended June 30, 2026Grants | Three Months Ended June 30, 2026Weighted Average Fair Value at Grant | Six Months Ended June 30, 2026Grants | Six Months Ended June 30, 2026Weighted Average Fair Value at Grant |
|---|---|---|---|---|
| Outstanding at beginning of period | ||||
| Granted | ||||
| Vested | () | () | ||
| Outstanding at end of period |
43
The restricted stock awards granted during 2026 were issued pursuant to the terms of CTBI’s 2025 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 March 2026 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.
Note 7 – Earnings Per Share
The following table sets forth the computation of basic and diluted earnings per share.
| (in thousands except per share data) | Three Months Ended · June 302026 | Three Months Ended · June 302025 | Six Months Ended · June 302026 | Six Months Ended · June 302025 |
|---|---|---|---|---|
| Numerator: | ||||
| Net income | ||||
| Denominator: | ||||
| Basic earnings per share: | ||||
| Weighted average shares | ||||
| Diluted earnings per share: | ||||
| Dilutive effect of equity grants | ||||
| Adjusted weighted average shares | ||||
| Earnings per share: | ||||
| Basic earnings per share | ||||
| Diluted earnings per share |
There were no options to purchase common shares that were excluded from the diluted calculations above for the three and six months ended June 30, 2026 and 2025. Unvested restricted stock grants were used in the calculation of diluted earnings per share based on the treasury method.
44
Note 8 – Accumulated Other Comprehensive Income (Loss)
The following table shows the reconciliation of accumulated other comprehensive income (loss) (“AOCI”) and amounts reclassified to earnings during the periods indicated.
| (in thousands) | Three Months Ended June 302026 | Three Months Ended June 302025 | Six Months Ended June 302026 | Six Months Ended June 302025 |
|---|---|---|---|---|
| Beginning balance | $(68,044) | $(86,065) | $(64,820) | $(98,369) |
| Unrealized holding gains (losses) on debt securities AFS | () | () | ||
| Tax expense (benefit) | () | () | ||
| Unrealized holding gains (losses) on debt securities AFS, net of tax | () | () | ||
| Reclassification adjustments for realized gains (losses) included in securities | ||||
| Tax expense (benefit) | () | () | ||
| Reclassification adjustments for realized gains (losses) included in securities, net of tax | 9 | 1 | 9 | 1 |
| Other comprehensive income (loss) | () | () | ||
| Ending balance | $(68,436) | $(80,617) | $(68,436) | $(80,617) |
Note 9 – Segment Reporting
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 June 30, 2026 | Community Banking Services | Holding Company | Eliminations | Consolidated |
|---|---|---|---|---|
| Interest income: | ||||
| Interest and fees on loans, including loans held for sale | $0 | |||
| Interest and dividends on securities: | ||||
| Taxable | 0 | |||
| Tax exempt | 0 | |||
| Interest and dividends on Federal Reserve Bank and Federal Home Loan Bank stock | 0 | |||
| Interest on Federal Reserve Bank deposits | 0 | |||
| Other, including interest on federal funds sold | 0 | |||
| Total interest income | 0 | |||
| Interest expense: | ||||
| Interest on deposits | 0 | |||
| Interest on repurchase agreements and federal funds purchased | 0 | |||
| Interest on long-term debt | (49) | |||
| Total interest expense | (49) | |||
| Net interest income | () | 49 | ||
| Provision for credit losses | 0 | |||
| Net interest income after provision for credit losses | () | 49 | ||
| Noninterest income: | ||||
| Deposit related fees | 0 | |||
| Gains on sales of loans, net | 0 | |||
| Trust and wealth management income | (150) | |||
| Loan related fees | 0 | |||
| Bank owned life insurance | 0 | |||
| Brokerage revenue | 0 | |||
| Securities gains (losses) | 0 | |||
| Dividend and undistributed income from subsidiaries | (31,209) | |||
| Other noninterest income | (667) | |||
| Total noninterest income | (32,026) | |||
| Noninterest expense: | ||||
| Officer salaries and employee benefits | (269) | |||
| Other salaries and employee benefits | (252) | |||
| Occupancy, net | 0 | |||
| Equipment | (56) | |||
| Data processing | (453) | |||
| Taxes other than property and payroll | 0 | |||
| Legal fees | 0 | |||
| Professional fees | (771) | |||
| Advertising and marketing | 0 | |||
| FDIC insurance | 0 | |||
| Other real estate owned provision and expense | 0 | |||
| Repossession expense | 0 | |||
| Other noninterest expense | (139) | |||
| Total noninterest expense | (1,940) | |||
| Income before income taxes | (30,037) | |||
| Income taxes | () | 0 | ||
| Net income | $(30,037) |
45
| (in thousands) Six Months Ended June 30, 2026 | Community Banking Services | Holding Company | Eliminations | Consolidated |
|---|---|---|---|---|
| Interest income: | ||||
| Interest and fees on loans, including loans held for sale | $0 | |||
| Interest and dividends on securities: | ||||
| Taxable | 0 | |||
| Tax exempt | 0 | |||
| Interest and dividends on Federal Reserve Bank and Federal Home Loan Bank stock | 0 | |||
| Interest on Federal Reserve Bank deposits | 0 | |||
| Other, including interest on federal funds sold | 0 | |||
| Total interest income | 0 | |||
| Interest expense: | ||||
| Interest on deposits | 0 | |||
| Interest on repurchase agreements and federal funds purchased | 0 | |||
| Interest on long-term debt | (99) | |||
| Total interest expense | (99) | |||
| Net interest income | () | 99 | ||
| Provision for credit losses | 0 | |||
| Net interest income after provision for credit losses | () | 99 | ||
| Noninterest income: | ||||
| Deposit related fees | 0 | |||
| Gains on sales of loans, net | 0 | |||
| Trust and wealth management income | (297) | |||
| Loan related fees | 0 | |||
| Bank owned life insurance | 0 | |||
| Brokerage revenue | 0 | |||
| Securities gains (losses) | 0 | |||
| Dividend and undistributed income from subsidiaries | (59,754) | |||
| Other noninterest income | (1,340) | |||
| Total noninterest income | (61,391) | |||
| Noninterest expense: | ||||
| Officer salaries and employee benefits | (538) | |||
| Other salaries and employee benefits | (503) | |||
| Occupancy, net | 0 | |||
| Equipment | (118) | |||
| Data processing | (907) | |||
| Taxes other than property and payroll | 0 | |||
| Legal fees | 0 | |||
| Professional fees | (1,539) | |||
| Advertising and marketing | 0 | |||
| FDIC insurance | 0 | |||
| Other real estate owned provision and expense | 0 | |||
| Repossession expense | 0 | |||
| Other noninterest expense | (277) | |||
| Total noninterest expense | (3,882) | |||
| Income before income taxes | (57,410) | |||
| Income taxes | () | 0 | ||
| Net income | $(57,410) |
46
| (in thousands) Three Months Ended June 30, 2025 | Community Banking Services | Holding Company | Eliminations | Consolidated |
|---|---|---|---|---|
| Interest income: | ||||
| Interest and fees on loans, including loans held for sale | $0 | |||
| Interest and dividends on securities: | ||||
| Taxable | 0 | |||
| Tax exempt | 0 | |||
| Interest and dividends on Federal Reserve Bank and Federal Home Loan Bank stock | 0 | |||
| Interest on Federal Reserve Bank deposits | 0 | |||
| Other, including interest on federal funds sold | 0 | |||
| Total interest income | 0 | |||
| Interest expense: | ||||
| Interest on deposits | 0 | |||
| Interest on repurchase agreements and federal funds purchased | 0 | |||
| Interest on advances from Federal Home Loan Bank | 0 | |||
| Interest on long-term debt | (54) | |||
| Total interest expense | (54) | |||
| Net interest income | () | 54 | ||
| Provision for credit losses | 0 | |||
| Net interest income after provision for credit losses | () | 54 | ||
| Noninterest income: | ||||
| Deposit related fees | 0 | |||
| Gains on sales of loans, net | 0 | |||
| Trust and wealth management income | (134) | |||
| Loan related fees | 0 | |||
| Bank owned life insurance | 0 | |||
| Brokerage revenue | 0 | |||
| Securities gains (losses) | 0 | |||
| Dividend and undistributed income from subsidiaries | (26,644) | |||
| Other noninterest income | (607) | |||
| Total noninterest income | (27,385) | |||
| Noninterest expense: | ||||
| Officer salaries and employee benefits | (222) | |||
| Other salaries and employee benefits | (230) | |||
| Occupancy, net | 0 | |||
| Equipment | (69) | |||
| Data processing | (443) | |||
| Tax other than property and payroll | 0 | |||
| Legal fees | 0 | |||
| Professional fees | (779) | |||
| Advertising and marketing | () | 0 | ||
| FDIC insurance | 0 | |||
| Other real estate owned provision and expense | 0 | |||
| Repossession expense | 0 | |||
| Other noninterest expense | (151) | |||
| Total noninterest expense | (1,894) | |||
| Income before income taxes | (25,437) | |||
| Income taxes | () | 0 | ||
| Net income | $(25,437) |
47
| (in thousands) Six Months Ended June 30, 2025 | Community Banking Services | Holding Company | Eliminations | Consolidated |
|---|---|---|---|---|
| Interest income: | ||||
| Interest and fees on loans, including loans held for sale | $0 | |||
| Interest and dividends on securities: | ||||
| Taxable | 0 | |||
| Tax exempt | 0 | |||
| Interest and dividends on Federal Reserve Bank and Federal Home Loan Bank stock | 0 | |||
| Interest on Federal Reserve Bank deposits | 0 | |||
| Other, including interest on federal funds sold | 0 | |||
| Total interest income | 0 | |||
| Interest expense: | ||||
| Interest on deposits | 0 | |||
| Interest on repurchase agreements and federal funds purchased | 0 | |||
| Interest on advances from Federal Home Loan Bank | 0 | |||
| Interest on long-term debt | (110) | |||
| Total interest expense | (110) | |||
| Net interest income | () | 110 | ||
| Provision for credit losses | 0 | |||
| Net interest income after provision for credit losses | () | 110 | ||
| Noninterest income: | ||||
| Deposit related fees | 0 | |||
| Gains on sales of loans, net | 0 | |||
| Trust and wealth management income | (272) | |||
| Loan related fees | 0 | |||
| Bank owned life insurance | 0 | |||
| Brokerage revenue | 0 | |||
| Securities gains (losses) | 0 | |||
| Dividend and undistributed income from subsidiaries | (50,113) | |||
| Other noninterest income | (1,213) | |||
| Total noninterest income | (51,598) | |||
| Noninterest expense: | ||||
| Officer salaries and employee benefits | (443) | |||
| Other salaries and employee benefits | (460) | |||
| Occupancy, net | 0 | |||
| Equipment | (137) | |||
| Data processing | (888) | |||
| Tax other than property and payroll | 0 | |||
| Legal fees | 0 | |||
| Professional fees | (1,561) | |||
| Advertising and marketing | () | 0 | ||
| FDIC insurance | 0 | |||
| Other real estate owned provision and expense | 0 | |||
| Repossession expense | 0 | |||
| Other noninterest expense | (300) | |||
| Total noninterest expense | (3,789) | |||
| Income before income taxes | (47,699) | |||
| Income taxes | () | 0 | ||
| Net income | $(47,699) |
48
The following tables present other segment disclosures:
| (in thousands) Three Months Ended June 30, 2026 | Community Banking Services | Holding Company | Eliminations | Consolidated |
|---|---|---|---|---|
| Depreciation and amortization | $0 | |||
| Amortization of operating lease right-of-use assets | 0 | |||
| Significant non-cash items: | ||||
| Provision for credit losses | 0 | |||
| Change in cash surrender value of bank owned life insurance | 0 | |||
| Expenditures for long-lived assets | 0 |
| (in thousands) Six Months Ended June 30, 2026 | Community Banking Services | Holding Company | Eliminations | Consolidated |
|---|---|---|---|---|
| Depreciation and amortization | $0 | |||
| Amortization of operating lease right-of-use assets | 0 | |||
| Significant non-cash items: | ||||
| Provision for credit losses | 0 | |||
| Change in cash surrender value of bank owned life insurance | 0 | |||
| Expenditures for long-lived assets | 0 |
| (in thousands) Three Months Ended June 30, 2025 | Community Banking Services | Holding Company | Eliminations | Consolidated |
|---|---|---|---|---|
| Depreciation and amortization | $0 | |||
| Amortization of operating lease right-of-use assets | 0 | |||
| Significant non-cash items: | ||||
| Provision for credit losses | 0 | |||
| Change in cash surrender value of bank owned life insurance | 0 | |||
| Expenditures for long-lived assets | 0 |
| (in thousands) Six Months Ended June 30, 2025 | Community Banking Services | Holding Company | Eliminations | Consolidated |
|---|---|---|---|---|
| Depreciation and amortization | $0 | |||
| Amortization of operating lease right-of-use assets | 0 | |||
| Significant non-cash items: | ||||
| Provision for credit losses | 0 | |||
| Change in cash surrender value of bank owned life insurance | 0 | |||
| Expenditures for long-lived assets | 0 |
49
Below is a reconciliation of our reportable segment assets to CTBI’s consolidated total assets:
| (in thousands) | June 30 2026 | December 31 2025 |
|---|---|---|
| Assets | ||
| Community banking services assets | ||
| Holding company assets | ||
| Elimination of subsidiary and parent cash and intercompany receivables | (4,172) | (3,706) |
| Elimination of investment in subsidiaries | (946,163) | (911,240) |
| Consolidated total assets |
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, 2025.
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 seventy-eight banking locations in eastern, northern, 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 June 30, 2026, we had total consolidated assets of $7.0 billion and total consolidated deposits, including repurchase agreements, of $6.0 billion. Total shareholders’ equity at June 30, 2026 was $891.8 million. Trust assets under management at June 30, 2026 were $4.3 billion, including CTB’s investment portfolio totaling $1.1 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, 2025.
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Results of Operations and Financial Condition
We reported record earnings for the second quarter 2026 of $29.6 million, or $1.64 per basic earnings per share, compared to $27.2 million, or $1.51 per basic share, earned during the first quarter 2026 and $24.9 million, or $1.38 per basic share, earned during the second quarter 2025. Total revenue for the quarter was $4.3 million above prior quarter and $8.3 million above prior year same quarter. Net interest income for the quarter increased $2.1 million compared to prior quarter and $6.8 million compared to prior year same quarter, and noninterest income increased $2.2 million compared to prior quarter and $1.4 million compared to prior year same quarter. Our provision for credit losses for the quarter increased $0.5 million from prior quarter and $0.7 million from prior year same quarter. Noninterest expense increased $0.8 million compared to prior quarter and $1.7 million compared to prior year same quarter. Earnings for the six months ended June 30, 2026 were $56.8 million, or $3.15 per basic share, compared to $46.9 million, or $2.60 per basic share, for the same period prior year.
Quarterly Highlights
❖ Net interest income for the quarter of $60.9 million was $2.1 million, or 3.6%, above prior quarter and $6.8 million, or 12.7%, above prior year same quarter, as our net interest margin increased 1 basis point from prior quarter and 16 basis points from prior year same quarter.
❖ Provision for credit losses at $2.8 million for the quarter increased $0.5 million from prior quarter and $0.7 million from prior year same quarter.
❖ Noninterest income for the quarter of $17.6 million was $2.2 million, or 14.2%, above prior quarter and $1.4 million, or 8.8%, above prior year same quarter.
❖ Noninterest expense for the quarter of $37.4 million was $0.8 million, or 2.3%, above prior quarter and $1.7 million, or 4.8%, above prior year same quarter.
❖ Our loan portfolio at $5.1 billion increased $134.1 million, an annualized 10.8%, for the quarter and $230.0 million, or 4.7%, from December 31, 2025.
❖ We had net loan charge-offs of $0.9 million, an annualized 0.07% of average loans, for the quarter compared to $1.3 million, an annualized 0.11% of average loans, for prior quarter and $1.4 million, an annualized 0.12% of average loans, for the second quarter 2025.
❖ Our total nonperforming loans at $29.7 million at June 30, 2026 increased $9.0 million for the quarter and $10.6 million from December 31, 2025. Nonperforming assets at $33.3 million increased $9.2 million for the quarter and $11.0 million from December 31, 2025.
❖ Deposits, including repurchase agreements, at $6.0 billion increased $221.9 million, an annualized 15.5%, for the quarter and $257.0 million, or 4.5%, from December 31, 2025.
❖ Shareholders’ equity at $891.8 million increased $20.6 million, an annualized 9.5%, for the quarter and $35.8 million, or 4.2%, from December 31, 2025.
Income Statement Review
| Six Months Ended June 30($ in thousands) | 2026 | 2025 | ChangeAmount | ChangePercent |
|---|---|---|---|---|
| Net interest income | $119,671 | $105,307 | $14,364 | 13.6% |
| Provision for credit losses | 5,082 | 5,662 | (580) | (10.2) |
| Noninterest income | 33,013 | 31,068 | 1,945 | 6.3 |
| Noninterest expense | 73,907 | 69,871 | 4,036 | 5.8 |
| Income taxes | 16,880 | 13,971 | 2,909 | 20.8 |
| Net income | $56,814 | $46,871 | $9,943 | 21.2% |
51
Consolidated Average Balance Sheets and Taxable Equivalent Income/Expense and Yields/Rates
| (in thousands) | Three Months Ended · June 30, 2026Average Balances | Three Months Ended · June 30, 2026Interest | Three Months Ended · June 30, 2026Average Rate | Three Months Ended · June 30, 2025Average Balances | Three Months Ended · June 30, 2025Interest | Three Months Ended · June 30, 2025Average Rate |
|---|---|---|---|---|---|---|
| Earning assets: | ||||||
| Loans (1)(2)(3) | $5,051,165 | $80,441 | 6.39% | $4,668,001 | $75,902 | 6.52% |
| Loans held for sale | 139 | 4 | 11.54 | 127 | 6 | 18.95 |
| Securities: | ||||||
| U.S. Treasury and agencies | 802,783 | 6,040 | 3.02 | 696,933 | 4,016 | 2.31 |
| Tax exempt state and political subdivisions (3) | 95,502 | 750 | 3.15 | 97,055 | 817 | 3.38 |
| Other securities | 186,802 | 1,213 | 2.60 | 212,686 | 1,693 | 3.19 |
| Federal Reserve Bank and Federal Home Loan Bank stock | 10,314 | 169 | 6.57 | 10,312 | 181 | 7.04 |
| Federal funds sold | 198 | 2 | 4.05 | 225 | 2 | 3.57 |
| Interest bearing deposits | 315,477 | 2,895 | 3.68 | 295,653 | 3,207 | 4.35 |
| Other investments | 245 | 1 | 1.64 | 245 | 1 | 1.64 |
| Investment in unconsolidated subsidiaries | 1,854 | 27 | 5.84 | 1,856 | 29 | 6.27 |
| Total earning assets | $6,464,479 | $91,542 | 5.68% | $5,983,093 | $85,854 | 5.76% |
| Allowance for credit losses | (61,864) | (57,063) | ||||
| Total earnings assets, net of allowance for credit losses | 6,402,615 | 5,926,030 | ||||
| Nonearning assets: | ||||||
| Cash and due from banks | 72,852 | 56,683 | ||||
| Premises and equipment and right of use assets, net | 68,335 | 66,848 | ||||
| Other assets | 273,605 | 264,361 | ||||
| Total assets | $6,817,407 | $6,313,922 | ||||
| Interest bearing liabilities: | ||||||
| Deposits: | ||||||
| Savings and demand deposits | $2,623,888 | $12,778 | 1.95% | $2,492,624 | $14,729 | 2.37% |
| Time deposits | 1,616,774 | 14,061 | 3.49 | 1,420,192 | 13,441 | 3.80 |
| Repurchase agreements and federal funds purchased | 301,328 | 2,592 | 3.45 | 233,982 | 2,352 | 4.03 |
| Advances from Federal Home Loan Bank | 285 | 0 | 0 | 1,404 | 13 | 3.71 |
| Long-term debt | 63,695 | 863 | 5.43 | 63,931 | 956 | 6.00 |
| Finance lease liability | 4,489 | 55 | 4.91 | 3,440 | 40 | 4.66 |
| Total interest bearing liabilities | $4,610,459 | $30,349 | 2.64% | 4,215,573 | $31,531 | 3.00% |
| Noninterest bearing liabilities: | ||||||
| Demand deposits | 1,252,277 | 1,241,901 | ||||
| Other liabilities | 67,757 | 57,912 | ||||
| Total liabilities | 5,930,493 | 5,515,386 | ||||
| Shareholders’ equity | 886,914 | 798,536 | ||||
| Total liabilities and shareholders’ equity | $6,817,407 | $6,313,922 |
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| Net interest income, tax equivalent | ||
|---|---|---|
| Less tax equivalent interest income | ||
| Net interest income | $ | |
| Net interest spread | 3.04% | 2.76% |
| Benefit of interest free funding | 0.76 | 0.88 |
| Net interest margin | 3.80% | 3.64% |
(1) Interest includes fees on loans of $0.6 million and $0.5 million for the three months ended June 30, 2026 and June 30, 2025, 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.
| (in thousands) | Six Months Ended · June 30, 2026Average Balances | Six Months Ended · June 30, 2026Interest | Six Months Ended · June 30, 2026Average Rate | Six Months Ended · June 30, 2025Average Balances | Six Months Ended · June 30, 2025Interest | Six Months Ended · June 30, 2025Average Rate |
|---|---|---|---|---|---|---|
| Earning assets: | ||||||
| Loans (1)(2)(3) | $4,993,034 | $158,403 | 6.40% | $4,600,919 | $148,701 | 6.52% |
| Loans held for sale | 118 | 7 | 11.96 | 116 | 9 | 15.65 |
| Securities: | ||||||
| U.S. Treasury and agencies | 811,219 | 11,504 | 2.86 | 718,105 | 8,070 | 2.27 |
| Tax exempt state and political subdivisions (3) | 98,900 | 1,563 | 3.19 | 98,046 | 1,639 | 3.37 |
| Other securities | 191,401 | 2,532 | 2.67 | 211,936 | 3,415 | 3.25 |
| Federal Reserve Bank and Federal Home Loan Bank stock | 10,201 | 340 | 6.72 | 10,084 | 369 | 7.38 |
| Federal funds sold | 155 | 3 | 3.90 | 113 | 2 | 3.57 |
| Interest bearing deposits | 289,155 | 5,207 | 3.63 | 274,545 | 5,915 | 4.34 |
| Other investments | 245 | 3 | 2.47 | 245 | 3 | 2.47 |
| Investment in unconsolidated subsidiaries | 1,855 | 52 | 5.65 | 1,856 | 58 | 6.30 |
| Total earning assets | $6,396,283 | $179,614 | 5.66% | $5,915,965 | $168,181 | 5.73% |
| Allowance for credit losses | (61,232) | (56,247) | ||||
| Total earnings assets, net of allowance for credit losses | 6,335,051 | 5,859,718 | ||||
| Nonearning assets: | ||||||
| Cash and due from banks | 65,443 | 55,685 | ||||
| Premises and equipment and right of use assets, net | 68,326 | 65,935 | ||||
| Other assets | 274,993 | 264,198 | ||||
| Total assets | $6,743,813 | $6,245,536 |
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| Interest bearing liabilities:Deposits: | ||||||
|---|---|---|---|---|---|---|
| Savings and demand deposits | $2,604,766 | 24,909 | $1.93% | $2,486,266 | 29,129 | 2.36% |
| Time deposits | 1,579,244 | 27,377 | 3.50 | 1,388,724 | 26,499 | 3.85 |
| Repurchase agreements and federal funds purchased | 300,450 | 5,191 | 3.48 | 233,975 | 4,670 | 4.02 |
| Advances from Federal Home Loan Bank | 288 | 0 | 0.00 | 861 | 13 | 3.04 |
| Long-term debt | 63,725 | 1,735 | 5.49 | 63,959 | 1,926 | 6.07 |
| Finance lease liability | 4,490 | 110 | 4.94 | 3,440 | 81 | 4.75 |
| Total interest bearing liabilities | $4,552,963 | 59,322 | $2.63% | $4,177,225 | 62,318 | 3.01% |
| Noninterest bearing liabilities: | ||||||
| Demand deposits | 1,244,381 | 1,224,388 | ||||
| Other liabilities | 66,113 | 57,136 | ||||
| Total liabilities | 5,863,457 | 5,458,749 | ||||
| Shareholders’ equity | 880,356 | 786,787 | ||||
| Total liabilities and shareholders’ equity | $6,743,813 | $6,245,536 | ||||
| Net interest income, tax equivalent | $120,292 | $105,863 | ||||
| Less tax equivalent interest income | 621 | 556 | ||||
| Net interest income | $119,671 | $105,307 | ||||
| Net interest spread | 3.03% | 2.72% | ||||
| Benefit of interest free funding | 0.76 | 0.89 | ||||
| Net interest margin | 3.79% | 3.61% |
(1) Interest includes fees on loans of $1.2 million and $1.1 million for the six months ended June 30, 2026 and June 30, 2025, 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.
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Net Interest Differential
The following tables illustrate the approximate effect of volume and rate changes on net interest differentials.
| Three Months Ended June 30 | Total Change | Change Due to |
|---|---|---|
| (in thousands) | 2026/2025 | Rate |
| Interest income: | ||
| Loans | $4,539 | $(94,044) |
| Loans held for sale | (2) | (10) |
| U.S. Treasury and agencies | 2,024 | (8,785) |
| Tax exempt state and political subdivisions | (67) | 146) |
| Other securities | (480) | 3,078) |
| Federal Reserve Bank and Federal Home Loan Bank stock | (12) | (13) |
| Federal funds sold | 0 | 4) |
| Interest bearing deposits | (312) | (3,610) |
| Other investments | 0 | 0 |
| Investment in unconsolidated subsidiaries | (2) | (1)) |
| Total interest income | 5,688 | (103,235) |
| Interest expense: | ||
| Savings and demand deposits | (1,951) | (13,924) |
| Time deposits | 620 | (27,781) |
| Repurchase agreements and federal funds purchased | 240 | (9,604) |
| Advances from Federal Home Loan Bank | (13) | (13) |
| Long-term debt | (93) | (36)) |
| Finance lease liability | 15 | (190) |
| Total interest expense | (1,182) | (51,548) |
| Net interest income | $6,870 | $(51,687) |
55
| Six Months Ended June 30 | Total Change | Change Due to |
|---|---|---|
| (in thousands) | 2026/2025 | Rate |
| Interest income: | ||
| Loans | $9,702 | $(91,252) |
| Loans held for sale | (2) | (3) |
| U.S. Treasury and agencies | 3,434 | (5,764) |
| Tax exempt state and political subdivisions | (76) | (191) |
| Other securities | (883) | 1,962) |
| Federal Reserve Bank and Federal Home Loan Bank stock | (29) | (63) |
| Federal funds sold | 1 | (5) |
| Interest bearing deposits | (708) | (3,152) |
| Other investments | 0 | 0 |
| Investment in unconsolidated subsidiaries | (6) | (6) |
| Total interest income | 11,433 | (98,474) |
| Interest expense: | ||
| Savings and demand deposits | (4,220) | (15,025) |
| Time deposits | 878 | (26,913) |
| Repurchase agreements and federal funds purchased | 521 | (9,232) |
| Advances from Federal Home Loan Bank | (13) | (13) |
| Long-term debt | (191) | (134)) |
| Finance lease liability | 29 | (178) |
| Total interest expense | (2,996) | (51,495) |
| Net interest income | $14,429 | $(46,979) |
For purposes of the above tables, 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 $60.9 million was $2.1 million, or 3.6%, above prior quarter and $6.8 million, or 12.7%, above prior year same quarter, as our net interest margin, on a fully tax equivalent basis, increased 1 basis point from prior quarter and 16 basis points from prior year same quarter. Our quarterly average earning assets increased $137.2 million, an annualized 2.2%, from prior quarter and $481.4 million, or 8.0%, from prior year same quarter. Our yield on average earning assets increased 3 basis points from prior quarter but decreased 8 basis points from prior year same quarter, while our cost of funds increased 3 basis points from prior quarter but decreased 36 basis points from prior year same quarter. Our ratio of average loans to deposits, including repurchase agreements, for the quarter remained at 87.2% from prior quarter compared to 86.6% for same quarter prior year. Net interest income for the six months ended June 30, 2026 at $119.7 million was $14.4 million, or 13.6%, above same period prior year.
Provision for Credit Losses
Our provision for credit losses at $2.8 million for the quarter increased $0.5 million from prior quarter and $0.7 million from prior year same quarter. Of the provision for the quarter, $2.6 million was attributable to the allowance for credit losses, with an additional expense of $174 thousand recognized in the provision for unfunded commitments. Provision for credit losses for the six months ended June 30, 2026 at $5.1 million was $0.6 million below same period prior year.
56
Noninterest Income
| Line item | Percent Change | Percent Change | Percent Change | ||||||
|---|---|---|---|---|---|---|---|---|---|
| 2Q 2026 Compared to: | |||||||||
| ($ in thousands) | 2Q 2026 | 1Q 2026 | 2Q 2025 | 1Q 2026 | 2Q 2025 | YTD 2026 | YTD 2025 | Percent Change | |
| Deposit related fees | $7,657 | $7,155 | 7,350 | 7.0% | $4.2% | $14,812 | 14,172 | 4.5% | |
| Trust and wealth management income | 4,724 | 4,462 | 4,092 | 5.9 | 15.4 | 9,186 | 8,073 | 13.8 | |
| Gains on sales of loans | 61 | 51 | 77 | 18.7 | (21.0) | 112 | 124 | (9.8) | |
| Loan related fees | 1,146 | 1,039 | 1,249 | 10.2 | (8.3) | 2,185 | 2,214 | (1.3) | |
| Bank owned life insurance revenue | 1,188 | 1,714 | 1,102 | (30.7) | 7.9 | 2,902 | 2,137 | 35.8 | |
| Brokerage revenue | 528 | 520 | 526 | 1.5 | 0.3 | 1,048 | 1,020 | 2.8 | |
| Other | 2,295 | 473 | 1,775 | 385.6 | 29.3 | 2,768 | 3,328 | (16.8) | |
| Total noninterest income | $17,599 | $15,414 | 16,171 | 14.2% | $8.8% | $33,013 | 31,068 | 6.3% |
Noninterest income for the quarter of $17.6 million was $2.2 million, or 14.2%, above prior quarter and $1.4 million, or 8.8%, above prior year same quarter. The variance quarter over quarter was primarily the result of increases in net securities gains ($1.4 million), deposit related fees ($0.5 million), and trust and wealth management income ($0.3 million). Year over year increases for the quarter included net securities gains ($0.8 million), deposit related fees ($0.3 million), and trust and wealth management income ($0.6 million). The variances in securities gains resulted primarily from changes in the valuation of our equity securities, as we converted a portion of Visa Class B stock to Class C. Noninterest income for the six months ended June 30, 2026 of $33.0 million was $1.9 million, or 6.3%, above prior year same period.
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Noninterest Expense
| Line item | Percent Change | Percent Change | Percent Change | ||||||
|---|---|---|---|---|---|---|---|---|---|
| 2Q 2026 Compared to: | |||||||||
| ($ in thousands) | 2Q 2026 | 1Q 2026 | 2Q 2025 | 1Q 2026 | 2Q 2025 | YTD 2026 | YTD 2025 | Percent Change | |
| Salaries | $13,923 | $13,629 | 13,667 | 2.2% | $1.9% | $27,552 | 26,936 | 2.3% | |
| Employee benefits | 9,297 | 8,476 | 7,987 | 9.7 | 16.4 | 17,773 | 14,836 | 19.8 | |
| Net occupancy and equipment | 3,367 | 3,699 | 3,172 | (9.0) | 6.1 | 7,066 | 6,612 | 6.9 | |
| Data processing | 2,851 | 2,955 | 3,326 | (3.5) | (14.3) | 5,806 | 6,185 | (6.1) | |
| Legal and professional fees | 1,084 | 1,164 | 1,001 | (6.9) | 8.3 | 2,248 | 2,226 | 1.0 | |
| Advertising and marketing | 841 | 700 | 765 | 20.1 | 9.9 | 1,541 | 1,438 | 7.1 | |
| Taxes other than property and payroll | 619 | 617 | 573 | 0.3 | 7.9 | 1,236 | 1,102 | 12.2 | |
| Other | 5,388 | 5,297 | 5,172 | 1.7 | 4.2 | 10,685 | 10,536 | 1.4 | |
| Total noninterest expense | $37,370 | $36,537 | 35,663 | 2.3% | $4.8% | $73,907 | 69,871 | 5.8% |
Noninterest expense for the quarter of $37.4 million was $0.8 million, or 2.3%, above prior quarter and $1.7 million, or 4.8%, above prior year same quarter. The quarter over quarter increase primarily resulted from an increase in salaries ($0.3 million) and employee benefits ($0.8 million), partially offset by a decrease in net occupancy and equipment expense ($0.3 million). The increase in employee benefits included increases in bonuses and incentives ($0.2 million) and the cost of group medical and life insurance expense ($0.8 million). The year over year increase for the quarter primarily resulted from increases in salaries ($0.3 million) and employee benefits ($1.3 million), including an increase in the cost of group medical and life insurance expense ($2.0 million) partially offset by a decrease in bonuses and incentives ($0.5 million). Noninterest expense for the six months ended June 30, 2026 of $73.9 million was $4.0 million, or 5.8%, above prior year same period.
Balance Sheet Review
CTBI’s total assets at $7.0 billion increased $248.2 million, or 14.8% annualized, for the quarter and $305.2 million, or 9.2% annualized, from December 31, 2025. Loans outstanding at $5.1 billion increased $134.1 million, an annualized 10.8%, for the quarter and $230.0 million, or 9.5% annualized, from December 31, 2025. The increase in loans for the quarter included a $57.4 million increase in the commercial loan portfolio, a $47.5 million increase in the residential loan portfolio, a $29.1 million increase in the consumer indirect loan portfolio, and a $0.1 million increase in the consumer direct loan portfolio. CTBI’s investment portfolio at $1.1 billion decreased $35.6 million, an annualized 13.1%, for the quarter and $69.0 million, or 12.4% annualized, from December 31, 2025 as management allocated investment maturities into the loan portfolio. Deposits in other banks increased $183.4 million for the quarter and $149.7 million from December 31, 2025.
Deposits, including repurchase agreements, at $6.0 billion increased $221.9 million, an annualized 15.5%, for the quarter and $257.0 million, or 9.1% annualized, from December 31, 2025. CTBI is not dependent on any one customer or group of customers for their source of deposits. As of June 30, 2026, two customers accounted for over 3% each (3.5% and 3.1%) of our $5.7 billion in deposits. Only these two customer relationships accounted for more than 1% each of our deposits.
58
Shareholders’ equity at $891.8 million increased $20.6 million, an annualized 9.5%, for the quarter and $35.8 million, or 8.4% annualized, from December 31, 2025. Net unrealized losses on securities, net of deferred taxes, were $68.4 million at June 30, 2026, compared to $68.0 million at March 31, 2026 and $64.8 million at December 31, 2025.
Loans
| ($ in thousands)Loan Category | June 30, 2026Balance | June 30, 2026Variance from Prior Year | June 30, 2026Net (Charge- Offs)/ Recoveries | June 30, 2026Nonperforming | June 30, 2026ACL |
|---|---|---|---|---|---|
| Commercial: | |||||
| Hotel/motel | $528,697 | 6.2% | $0 | $0 | $7,116 |
| Commercial real estate residential | 599,454 | 3.2 | 3 | 2,617 | 6,301 |
| Commercial real estate nonresidential | 1,005,462 | 4.7 | (78) | 5,143 | 11,517 |
| Dealer floorplans | 79,821 | (4.8) | 0 | 0 | 855 |
| Commercial other | 384,080 | 3.5 | (675) | 10,641 | 4,257 |
| Total commercial | 2,597,514 | 4.2 | (750) | 18,401 | 30,046 |
| Residential: | |||||
| Real estate mortgage | 1,289,157 | 6.8 | (176) | 9,638 | 15,781 |
| Home equity | 195,270 | 4.5 | (12) | 954 | 1,401 |
| Total residential | 1,484,427 | 6.5 | (188) | 10,592 | 17,182 |
| Consumer: | |||||
| Consumer direct | 139,865 | (3.9) | (349) | 132 | 1,803 |
| Consumer indirect | 903,125 | 4.7 | (948) | 620 | 13,970 |
| Total consumer | 1,042,990 | 3.5 | (1,297) | 752 | 15,773 |
| Total loans | $5,124,931 | 4.7% | $(2,235) | $29,745 | $63,001 |
Total Deposits and Repurchase Agreements
| Line item | Percent Change | Percent Change | Percent Change | |||
|---|---|---|---|---|---|---|
| 2Q 2026 Compared to: | ||||||
| ($ in thousands) | 2Q 2026 | 1Q 2026 | 2Q 2025 | 1Q 2026 | 2Q 2025 | |
| Noninterest bearing deposits | $1,259,364 | $1,262,835 | 1,258,205 | (0.3%) | 0.1% | |
| Interest bearing deposits | ||||||
| Interest checking | 188,978 | 190,769 | 173,795 | (0.9) | 8.7 | |
| Money market savings | 1,963,115 | 1,917,509 | 1,820,230 | 2.4 | 7.8 | |
| Savings accounts | 497,390 | 508,553 | 508,467 | (2.2) | (2.2) | |
| Time deposits | 1,748,916 | 1,554,554 | 1,472,311 | 12.5 | 18.8 | |
| Repurchase agreements | 297,094 | 298,721 | 225,075 | (0.5) | 32.0 | |
| Total interest bearing deposits and repurchase agreements | 4,695,493 | 4,470,106 | 4,199,878 | 5.0 | 11.8 | |
| Total deposits and repurchase agreements | $5,954,857 | $5,732,941 | 5,458,083 | 3.9% | 9.1% |
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Deposit Maturities
Maturities of uninsured certificates of deposit and other time deposits are presented below:
Maturities by Period at June 30, 2026
| (in thousands) | After 5 Years |
| Uninsured certificates of deposits and other time deposits greater than $250,000 | $0 |
As of June 30, 2026, we had approximately $1.7 million in uninsured deposits. CTBI has no brokered deposits.
Asset Quality
Our total nonperforming loans at $29.7 million at June 30, 2026 increased $9.0 million for the quarter and $10.6 million from December 31, 2025. Nonaccrual loans at $10.8 million decreased $0.3 million from prior quarter but increased $2.3 million from December 31, 2025. Accruing loans 90+ days past due at $19.0 million increased $9.4 million from prior quarter and $8.3 million from December 31, 2025, as a well secured $8.7 million commercial relationship in the process of collection moved from the 30-89 days past due category during the quarter. Accruing loans 30-89 days past due at $20.3 million decreased $4.5 million from prior quarter but increased $0.1 million from December 31, 2025. 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 82% 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 3 to the condensed consolidated financial statements contained herein.
We had net loan charge-offs of $0.9 million, an annualized 0.07% of average loans, for the quarter compared to $1.3 million, an annualized 0.11% of average loans, for prior quarter and $1.4 million, an annualized 0.12% of average loans, for the second quarter 2025. Of the net charge-offs for the quarter, $0.2 million were in commercial loans, $0.5 million were in consumer indirect loans, and $0.2 million were in consumer direct loans. Net loan charge-offs for the six months ended June 30, 2026 were $2.2 million, or an annualized 0.09% of average loans, compared to $2.9 million, or an annualized 0.13% of average loans, for the same period prior year.
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Allowance for Credit Losses
Our reserve coverage (allowance for credit losses to nonperforming loans) at June 30, 2026 was 211.8% compared to 314.0% at December 31, 2025 and 237.1% at June 30, 2025. Nonaccrual loans to totals loans were 0.2% at June 30, 2026 and December 31, 2025. The allowance for credit losses to nonaccrual loans were 583.7% at June 30, 2026 compared to 704.6% at December 31, 2025. Our allowance for credit losses as a percentage of total loans outstanding at June 30, 2026 remained at 1.23% from December 31, 2025 and June 30, 2025. The table below shows the changes in components of the allowance for credit losses during the three months ended June 30, 2026:
| (in thousands) | |
|---|---|
| Beginning balance, April 1, 2026 | $61,321 |
| New loan volume | 5,097 |
| Changes in existing loan balances | (546) |
| Loan exiting | (2,904) |
| Historical loss rate | 245 |
| Qualitative factors | (246) |
| Other changes | 34 |
| Ending balance, June 30, 2026 | $63,001 |
See Note 3 to our condensed consolidated financial statements contained herein for additional information regarding our allowance for credit losses.
Dividends
On July 28, 2026, the Board of Directors of CTBI declared a quarterly cash dividend of $0.65 per share beginning with the October 1, 2026 payment to shareholders of record on September 15, 2026. This represents an increase of 22.6% in the quarterly cash dividend. In addition to the quarterly cash dividend, the Board approved a one-time cash dividend payment of $0.06 per share to shareholders of record on September 15, 2026, also to be paid on October 1, 2026.
The following schedule shows the quarterly cash dividends paid for the past six quarters:
| Pay Date | Record Date | Amount Per Share |
|---|---|---|
| July 1, 2026 | June 15, 2026 | $0.53 |
| April 1, 2026 | March 15, 2026 | $0.53 |
| January 1, 2026 | December 15, 2025 | $0.53 |
| October 1, 2025 | September 15, 2025 | $0.53 |
| July 1, 2025 | June 15, 2025 | $0.47 |
| April 1, 2025 | March 15, 2025 | $0.47 |
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 June 30, 2026, we had approximately $514.3 million in cash and cash equivalents and approximately $113.0 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 $363.7 million and $174.7 million, respectively, at December 31, 2025. 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 June 30, 2026 and December 31, 2025. As of June 30, 2026, we had a $543.9 million available borrowing position with the Federal Home Loan Bank, compared to $546.9 million at December 31, 2025. 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 June 30, 2026 and December 31, 2025, 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 June 30, 2026 were deposits with the Federal Reserve of $434.4 million, compared to $288.1 million at December 31, 2025. Additionally, we project cash flows from our investment portfolio to generate additional liquidity over the next 90 days.
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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 June 30, 2026, available-for-sale (“AFS”) securities comprised 99.6% of the total investment portfolio, and the AFS portfolio was 118% of
equity capital. Ninety 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 grow our shareholders’ equity while also providing an annual dividend yield to shareholders for the quarter ended June 30, 2026 of 2.93%. Shareholders’ equity increased 2.4% for the quarter and 4.2% from December 31, 2025. Our primary source of capital growth is the retention of earnings. Cash dividends were $1.06 per share for the first six months of 2026 compared to $0.94 per share for the first six months of 2025. We retained 66.3% of our earnings for the six months ended June 30, 2026 compared to 63.8% for the six months ended June 30, 2025.
Insured depository institutions are required to meet certain capital level requirements. Management elected to use the community bank leverage ratio (“CBLR”) framework for CTBI and CTB. The CBLR 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. A CBLR greater than 9% is 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. CTBI’s CBLR ratio as of June 30, 2026 was 13.89%. CTB’s CBLR ratio as of June 30, 2026 was 13.43%.
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As of June 30, 2026, 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 June 30, 2026, 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 our consolidated financial statements included in our annual report on Form 10-K for the year ended December 31, 2025. We have identified the following critical accounting estimate:
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 3 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.
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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. See Note 3 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.
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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.
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.
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 2.91% over one year and 5.47% over two years. A 200 basis point decrease in the yield curve would decrease net interest income by an estimated 2.39% over one year and 4.98% 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, 2025.
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 June 30, 2026, 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 June 30, 2026 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.
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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 June 30, 2026 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 June 30, 2026, 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.
| Exhibit 3.1 |
| Exhibit 3.2 |
| Exhibit 3.3 |
| Exhibit 31.1 Exhibit 31.2 |
| Exhibit 32.1 Exhibit 32.2 |
| Exhibit 101.INS |
| Exhibit 101.SCH |
| Exhibit 101.CAL |
| Exhibit 101.DEF |
| Exhibit 101.LAB |
| Exhibit 101.PRE |
| Exhibit 104 |
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