Community Trust Bancorp, Inc.

Condensed Consolidated Statements of Income and Comprehensive Income

(unaudited)

	Three Months Ended						Six Months Ended
	June 30						June 30
(in thousands except per share data)	2015			2014			2015			2014
Interest income:
Interest and fees on loans, including loans held for sale	$	32,669		$	31,937		$	64,844		$	63,550
Interest and dividends on securities
Taxable		2,408			2,806			4,963			5,853
Tax exempt		682			664			1,353			1,248
Interest and dividends on Federal Reserve Bank and Federal Home Loan Bank stock		250			298			504			630
Other, including interest on federal funds sold		74			106			144			223
Total interest income		36,083			35,811			71,808			71,504

Interest expense:
Interest on deposits		2,359			2,472			4,665			4,934
Interest on repurchase agreements and other short-term borrowings		242			217			458			409
Interest on advances from Federal Home Loan Bank		10			5			24			11
Interest on long-term debt		290			284			574			567
Total interest expense		2,901			2,978			5,721			5,921

Net interest income		33,182			32,833			66,087			65,583
Provision for loan losses		2,319			735			4,220			2,080
Net interest income after provision for loan losses		30,863			32,098			61,867			63,503

Noninterest income:
Service charges on deposit accounts		6,046			5,987			11,628			11,418
Gains on sales of loans, net		823			288			1,113			478
Trust and wealth management income		2,366			2,199			4,605			4,308
Loan related fees		1,242			766			2,106			1,445
Bank owned life insurance		521			476			1,042			950
Brokerage revenue		367			634			663			1,204
Securities gains (losses)		(14	)		(51	)		130			(111	)
Other noninterest income		877			673			1,677			1,345
Total noninterest income		12,228			10,972			22,964			21,037

Noninterest expense:
Officer salaries and employee benefits		2,919			2,784			5,891			5,622
Other salaries and employee benefits		10,703			10,490			21,376			21,069
Occupancy, net		1,908			1,937			3,995			4,101
Equipment		772			938			1,549			1,838
Data processing		1,695			1,933			3,627			3,858
Bank franchise tax		1,276			1,208			2,544			2,417
Legal fees		526			656			1,099			1,354
Professional fees		548			425			973			840
FDIC insurance		586			558			1,192			1,207
Other real estate owned provision and expense		752			736			1,236			2,241
Repossession expense		256			222			600			541
Other noninterest expense		4,372			3,369			8,049			7,029
Total noninterest expense		26,313			25,256			52,131			52,117

Income before income taxes		16,778			17,814			32,700			32,423
Income taxes		4,376			5,619			9,360			10,088
Net income		12,402			12,195			23,340			22,335


Other comprehensive income:
Unrealized holding gains (losses) on securities available-for-sale:
Unrealized holding gains (losses) arising during the period		(5,385	)		6,571			62			12,651
Less: Reclassification adjustments for realized gains (losses) included in net income		(14	)		(51	)		130			(111	)
Tax (benefit) expense		(1,880	)		2,318			(24	)		4,467
Other comprehensive income (loss), net of tax		(3,491	)		4,304			(44	)		8,295
Comprehensive income	$	8,911		$	16,499		$	23,296		$	30,630

Basic earnings per share	$	0.71		$	0.70		$	1.34		$	1.29
Diluted earnings per share	$	0.71		$	0.70		$	1.34		$	1.28

Weighted average shares outstanding-basic		17,421			17,318			17,411			17,313
Weighted average shares outstanding-diluted		17,465			17,393			17,458			17,393

Dividends declared per share	$	0.300		$	0.290		$	0.600		$	0.581

See notes to condensed consolidated financial statements.

Community Trust Bancorp, Inc.

Condensed Consolidated Statements of Cash Flows

(unaudited)

	Six Months Ended
	June 30
(in thousands)	2015			2014
Cash flows from operating activities:
Net income	$	23,340		$	22,335
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		2,027			2,256
Deferred taxes		396			935
Stock-based compensation		387			344
Excess tax benefits of stock-based compensation		148			10
Provision for loan losses		4,220			2,080
Write-downs of other real estate owned and other repossessed assets		363			1,161
Gains on sale of mortgage loans held for sale		(1,113	)		(478	)
Securities (gains) losses		(130	)		111
Losses on sale of assets, net		61			43
Proceeds from sale of mortgage loans held for sale		42,455			20,310
Funding of mortgage loans held for sale		(41,071	)		(19,900	)
Amortization of securities premiums and discounts, net		1,372			1,349
Change in cash surrender value of bank owned life insurance		(793	)		(711	)
Mortgage servicing rights:
Fair value adjustments		30			507
New servicing assets created		(297	)		(145	)
Changes in:
Other assets		(9,372	)		1,123
Other liabilities		(4,204	)		(684	)
Net cash provided by operating activities		17,819			30,646

Cash flows from investing activities:
Certificates of deposit in other banks:
Maturity of certificates of deposit		1,532			95
Securities available-for-sale (AFS):
Purchase of AFS securities		(13,816	)		(175,553	)
Proceeds from the sales of AFS securities		40,944			112,949
Proceeds from prepayments and maturities of AFS securities		30,512			35,776
Securities held-to-maturity (HTM):
Proceeds from maturities of HTM securities		1			0
Change in loans, net		(66,589	)		(17,970	)
Purchase of premises and equipment		(1,067	)		(702	)
Proceeds from sale of premises and equipment		(23	)		18
Redemption of stock by Federal Home Loan Bank		0			7,746
Additional investment in Federal Reserve Bank stock		(18	)		(1	)
Proceeds from sale of other real estate and other repossessed assets		4,015			3,150
Additional investment in other real estate and other repossessed assets		(85	)		0
Net cash used in investing activities		(4,594	)		(34,492	)

Cash flows from financing activities:
Change in deposits, net		38,814			32,115
Change in repurchase agreements, federal funds purchased, and other short-term borrowings, net		7,769			12,652
Advances from Federal Home Loan Bank		70,000			0
Payments on advances from Federal Home Loan Bank		(80,058	)		(58	)
Issuance of common stock		593			594
Netting of common stock		(189	)		0
Excess tax benefits of stock-based compensation		(148	)		(10	)
Dividends paid		(10,492	)		(10,115	)
Net cash provided by financing activities		26,289			35,178
Net increase in cash and cash equivalents		39,514			31,332
Cash and cash equivalents at beginning of period		105,517			106,641
Cash and cash equivalents at end of period	$	145,031		$	137,973

Supplemental disclosures:
Income taxes paid	$	12,475		$	6,720
Interest paid		5,337			5,431
Non-cash activities:
Loans to facilitate the sale of other real estate and repossessed assets		2,165			5,225
Common stock dividends accrued, paid in subsequent quarter		214			201
Real estate acquired in settlement of loans		5,969			3,469

See notes to condensed consolidated financial statements.

Community Trust Bancorp, Inc.

Notes to Condensed Consolidated Financial Statements (unaudited)

Note 1 - Summary of Significant Accounting Policies

In the opinion of management, the unaudited condensed consolidated financial statements include all adjustments (which consist of normal recurring accruals) necessary, to present fairly the condensed consolidated financial position as of June 30, 2015, the results of operations for the three and six months ended June 30, 2015 and 2014, and the cash flows for the six months ended June, 2015 and 2014. In accordance with accounting principles generally accepted in the United States of America for interim financial information, these statements do not include certain information and footnote disclosures required by accounting principles generally accepted in the United States of America for complete annual financial statements. The results of operations for the three and six months ended June 30, 2015 and 2014, and the cash flows for the six months ended June 30, 2015 and 2014, are not necessarily indicative of the results to be expected for the full year. The condensed consolidated balance sheet as of December 31, 2014 has been derived from the audited consolidated financial statements of Community Trust Bancorp, Inc. ("CTBI") for that period. For further information, refer to the consolidated financial statements and footnotes thereto for the year ended December 31, 2014, 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. (the "Bank") and Community Trust and Investment Company. All significant intercompany transactions have been eliminated in consolidation.

Reclassifications – Certain reclassifications considered to be immaterial have been made in the prior year condensed consolidated financial statements to conform to current year classifications. These reclassifications had no effect on net income.

All share data has been adjusted for the 10% stock dividend issued on June 2, 2014.

New Accounting Standards –

Ø Accounting for Investments in Qualified Affordable Housing Projects – In January 2014, the FASB issued ASU No. 2014-01, Investments—Equity Method and Joint Ventures (Topic 323): Accounting for Investments in Qualified Affordable Housing Projects, which enables companies that invest in affordable housing projects that qualify for the low-income housing tax credit (LIHTC) to elect to use the proportional amortization method if certain conditions are met. Under the proportional amortization method, the initial investment cost of the project is amortized in proportion to the amount of tax credits and benefits received, with the results of the investment presented on a net basis as a component of income tax expense (benefit). ASU 2014-01 is effective for interim and annual periods beginning after December 15, 2014. The adoption of this ASU did not have a material impact on CTBI's consolidated financial statements.

Ø Reclassification of Residential Real Estate Collateralized Consumer Mortgage Loans upon Foreclosure – In January 2014, the FASB also issued ASU No. 2014-04, Receivables—Troubled Debt Restructurings by Creditors (Subtopic 310-40): Reclassification of Residential Real Estate Collateralized Consumer Mortgage Loans upon Foreclosure, which clarifies when an in-substance foreclosure or repossession of residential real estate property occurs, requiring a creditor to reclassify the loan to other real estate. According to ASU 2014-04, a consumer mortgage loan should be reclassified to other real estate either upon the creditor obtaining legal title to the real estate collateral or when the borrower voluntarily conveys all interest in the real estate property to the creditor through a deed in lieu of foreclosure or similar legal agreement. ASU 2014-04 also clarifies that a creditor should not delay reclassification when a borrower has a legal right of redemption. ASU 2014-04 is effective for interim and annual periods beginning after December 15, 2014. The adoption of this ASU did not have a material impact on CTBI's consolidated financial statements as our practice was already consistent with the new guidance.

Ø Elimination of Extraordinary Reporting – In January 2015, the FASB issued ASU No. 2015-01, Income Statement – Extraordinary and Unusual Items (Subtopic 225-20): Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items. ASU No. 2015-01 eliminates from U.S. GAAP the concept of an extraordinary item. The FASB issued this ASU as part of its initiative to reduce complexity in accounting standards. The objective of the simplification initiative is to identify, evaluate, and improve areas of U.S. GAAP for which cost and complexity can be reduced while maintaining or improving the usefulness of the information provided to the users of financial statements. The amendments in this ASU are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. A reporting entity may apply the amendments prospectively. A reporting entity also may apply the amendments retrospectively to all prior periods presented in the financial statements. Early adoption is permitted provided that the guidance is applied from the beginning of the fiscal year of adoption. The effective date is the same for both public business entities and all other entities. For an entity that prospectively applies the guidance, the only required transition disclosure will be to disclose, if applicable, both the nature and the amount of an item included in income from continuing operations after adoption that adjusts an extraordinary item previously classified and presented before the date of adoption. An entity retrospectively applying the guidance should provide the disclosures in paragraphs 250-10-50-1 through 50-2. The adoption of this ASU is not expected to have a material impact on CTBI's consolidated financial statements.

Ø Intangibles – Goodwill and Other – Internal-Use Software – In April 2015, the FASB issued ASU No. 2015-05, Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40). The amendments in this update provide guidance to customers about whether a cloud computing arrangement includes a software license. If a cloud computing arrangement includes a software license, then the customer should account for the software license element of the arrangement consistent with the acquisition of other software licenses. If a cloud computing arrangement does not include a software license, the customer should account for the arrangement as a service contract. The guidance will not change GAAP for a customer's accounting for service contracts. In addition, the guidance in this update supersedes paragraph 350-40-25-16. Consequently, all software licenses within the scope of Subtopic 350-40 will be accounted for consistent with other licenses of intangible assets. For public business entities, the amendments will be effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2015. Early adoption is permitted. An entity can elect to adopt the amendments either (1) prospectively to all arrangements entered into or materially modified after the effective date or (2) retrospectively. For prospective transition, the only disclosure requirements at transition are the nature of and reason for the change in accounting principle, the transition method, and a qualitative description of the financial statement line items affected by the change. For retrospective transition, the disclosure requirements at transition include the requirements for prospective transition and quantitative information about the effects of the accounting change. We are currently evaluating the impact of adopting ASU 2015-05, but we do not expect the adoption to have a material effect on CTBI's consolidated financial statements.

Critical Accounting Policies and Estimates

The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America 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 policies to be appropriate, and actual results have not differed materially from those determined using necessary estimates.

We have identified the following critical accounting policies:

Investments – Management determines the classification of securities at purchase. We classify securities into held-to-maturity, trading, or available-for-sale categories. Held-to-maturity securities are those which we have the positive intent and ability to hold to maturity and are reported at amortized cost. In accordance with Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 320, Investment Securities, investments in debt securities that are not classified as held-to-maturity and equity securities that have readily determinable fair values shall be classified in one of the following categories and measured at fair value in the statement of financial position:

a. Trading securities. Securities that are bought and held principally for the purpose of selling them in the near term (thus held for only a short period of time) shall be classified as trading securities. Trading generally reflects active and frequent buying and selling, and trading securities are generally used with the objective of generating profits on short-term differences in price.

b. Available-for-sale securities. Investments not classified as trading securities (nor as held-to-maturity securities) shall be classified as available-for-sale securities.

We do not have any securities that are classified as trading securities. Available-for-sale securities are reported at fair value, with unrealized gains and losses included as a separate component of shareholders' equity, net of tax. If declines in fair value are other than temporary, the carrying value of the securities is written down to fair value as a realized loss with a charge to income for the portion attributable to credit losses and a charge to other comprehensive income for the portion that is not credit related.

Gains or losses on disposition of securities are computed by specific identification for all securities except for shares in mutual funds, which are computed by average cost. Interest and dividend income, adjusted by amortization of purchase premium or discount, is included in earnings.

When the fair value of a security is below its amortized cost, and depending on the length of time the condition exists and the extent the fair market value is below amortized cost, additional analysis is performed to determine whether an other than temporary impairment condition exists. Available-for-sale and held-to-maturity securities are analyzed quarterly for possible other than temporary impairment. The analysis considers (i) whether we have the intent to sell our securities prior to recovery and/or maturity and (ii) whether it is more likely than not that we will not have to sell our securities prior to recovery and/or maturity. Often, the information available to conduct these assessments is limited and rapidly changing, making estimates of fair value subject to judgment. If actual information or conditions are different than estimated, the extent of the impairment of the security may be different than previously estimated, which could have a material effect on the CTBI's results of operations and financial condition.

Loans – Loans with the ability and the intent to be held until maturity and/or payoff are reported at the carrying value of unpaid principal reduced by unearned interest, an allowance for loan and lease losses, and unamortized deferred fees or costs. Income is recorded on the level yield basis. Interest accrual is discontinued when management believes, after considering economic and business conditions, collateral value, and collection efforts, that the borrower's financial condition is such that collection of interest is doubtful. Any loan greater than 90 days past due must be well secured and in the process of collection to continue accruing interest. Cash payments received on nonaccrual loans generally are applied against principal, and interest income is only recorded once principal recovery is reasonably assured. Loans are not reclassified as accruing until principal and interest payments remain current for a period of time, generally six months, and future payments appear reasonably certain. Included in certain loan categories of impaired loans are troubled debt restructurings that were classified as impaired. A restructuring of a debt constitutes a troubled debt restructuring if the creditor for economic or legal reasons related to the debtor's financial difficulties grants a concession to the debtor that it would not otherwise consider.

Loan origination and commitment fees and certain direct loan origination costs are deferred and the net amount amortized over the estimated life of the related loans, leases, or commitments as a yield adjustment.

Allowance for Loan and Lease Losses – We maintain an allowance for loan and lease losses ("ALLL") at a level that is appropriate to cover estimated credit losses on individually evaluated loans determined to be impaired, as well as estimated credit losses inherent in the remainder of the loan and lease portfolio. Since arriving at an appropriate ALLL involves a high degree of management judgment, we use an ongoing quarterly analysis to develop a range of estimated losses. In accordance with accounting principles generally accepted in the United States, we use our best estimate within the range of potential credit loss to determine the appropriate ALLL. Credit losses are charged and recoveries are credited to the ALLL.

We utilize an internal risk grading system for commercial credits. Those larger commercial credits that exhibit probable or observed credit weaknesses are subject to individual review. The borrower's cash flow, adequacy of collateral coverage, and other options available to CTBI, including legal remedies, are evaluated. The review of individual loans includes those loans that are impaired as defined by ASC 310-35, Impairment of a Loan. We evaluate the collectability of both principal and interest when assessing the need for loss provision. Historical loss rates are analyzed and applied to other commercial loans not subject to specific allocations. The ALLL allocation for this pool of commercial loans is established based on the historical average, maximum, minimum, and median loss ratios.

A loan is considered impaired when, based on current information and events, it is probable that CTBI will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement. Factors considered by management in determining impairment include payment status, collateral value, and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower's prior payment record, and the amount of the shortfall in relation to the principal and interest owed. Impairment is measured on a loan-by-loan basis for commercial and construction loans by either the present value of expected future cash flows discounted at the loan's effective interest rate, the loan's obtainable market price, or the fair value of the collateral if the loan is collateral dependent.

Homogenous loans, such as consumer installment, residential mortgages, and home equity lines are not individually risk graded. The associated ALLL for these loans is measured under ASC 450, Contingencies.

When any secured commercial loan is considered uncollectable, whether past due or not, a current assessment of the value of the underlying collateral is made. If the balance of the loan exceeds the fair value of the collateral, the loan is placed on non-accrual and the loan is charged down to the value of the collateral less estimated cost to sell or a specific reserve equal to the difference between book value of the loan and the fair value assigned to the collateral is created until such time as the loan is foreclosed. When the foreclosed collateral has been legally assigned to CTBI, a charge off is taken, if necessary, in order that the remaining balance reflects the fair value estimated less costs to sell of the collateral then transferred to other real estate owned or other repossessed assets. When any unsecured commercial loan is considered uncollectable the loan is charged off no later than at 90 days past due.

All closed-end consumer loans (excluding conventional 1-4 family residential loans and installment and revolving loans secured by real estate) are charged off no later than 120 days (5 monthly payments) delinquent. If a loan is considered uncollectable, it is charged off earlier than 120 days delinquent. For conventional 1-4 family residential loans and installment and revolving loans secured by real estate, when a loan is 90 days past due, a current assessment of the value of the real estate is made. If the balance of the loan exceeds the fair value of the property, the loan is placed on nonaccrual. Foreclosure proceedings are normally initiated after 120 days. When the foreclosed property has been legally assigned to CTBI, the fair value less estimated costs to sell is transferred to other real estate owned and the remaining balance is taken as a charge-off.

Historical loss rates for loans are adjusted for significant factors that, in management's judgment, reflect the impact of any current conditions on loss recognition. We use twelve rolling quarters for our historical loss rate analysis. Factors that we consider include delinquency trends, current economic conditions and trends, strength of supervision and administration of the loan portfolio, levels of underperforming loans, level of recoveries to prior year's charge-offs, trends in loan losses, industry concentrations and their relative strengths, amount of unsecured loans, and underwriting exceptions. Based upon management's judgment, "best case," "worst case," and "most likely" scenarios are determined. The total of each of these weighted factors is then applied against the applicable portion of the portfolio and the ALLL is adjusted accordingly to approximate the most likely scenario. Management continually reevaluates the other subjective factors included in its ALLL analysis.

Other Real Estate Owned – When foreclosed properties are acquired, appraisals are obtained and the properties are booked at the current market value less expected sales costs. Additionally, periodic updated appraisals are obtained on unsold foreclosed properties. When an updated appraisal reflects a market value below the current book value, a charge is booked to current earnings to reduce the property to its new market value less expected sales costs. 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. All revenues and expenses related to the carrying of other real estate owned are recognized by a charge to income.

Income Taxes – Income tax expense is based on the taxes due on the consolidated tax return plus deferred taxes based on the expected future tax benefits and consequences of temporary differences between carrying amounts and tax bases of assets and liabilities, using enacted tax rates. Any interest and penalties incurred in connection with income taxes are recorded as a component of income tax expense in the consolidated financial statements. During the six months ended June 30, 2015 and 2014, CTBI did not recognize a significant amount of interest expense or penalties in connection with income taxes.

CTBI is currently under IRS examination of its 2013 corporate income tax return. Management does not expect that the results of the examination will have a material effect on our financial condition. While management believes our tax positions are appropriate, the IRS could challenge our positions as a part of this examination.

Note 2 – Stock-Based Compensation

CTBI's compensation expense related to stock option grants was $10 thousand and $2 thousand, respectively, for the three months ended June 30, 2015 and 2014, and $18 thousand and $6 thousand, respectively, for the six months ended June 30, 2015 and 2014. Restricted stock expense for the three months ended June 30, 2015 and 2014 was $180 thousand and $151 thousand, respectively, including $20 thousand and $30 thousand in dividends paid for each period. Restricted stock expense for the six months ended June 30, 2015 and 2014 was $369 thousand and $338 thousand, respectively, including $39 thousand and $60 thousand in dividends. As of June 30, 2015, there was a total of $0.2 million of unrecognized compensation expense related to unvested stock option awards that will be recognized as expense as the awards vest over a weighted average period of 4.3 years and a total of $0.8 million of unrecognized compensation expense related to restricted stock grants that will be recognized as expense as the awards vest over a weighted average period of 2.0 years.

There were no shares of restricted stock granted during the three months ended June 30, 2015 and 2014. There were 10,582 and 4,561 shares of restricted stock granted during the six months ended June 30, 2015 and 2014, respectively. The restrictions on the restricted stock lapse ratably over four years or in the event of a change in control of CTBI or the death of the participant. In the event of the disability of the participant, the restrictions will lapse on a pro rata basis. The Compensation Committee of the Board of Directors will have discretion to review and revise restrictions applicable to a participant's restricted stock in the event of the participant's retirement. There were no options granted to purchase shares of CTBI common stock during the three months ended June 30, 2015. There were 20,000 options granted during the six months ended June 30, 2015. No options were granted during the three or six months ended June 30, 2014.

The fair value of options granted during the six months ended June 30, 2015, were established at the date of grant using a Black-Scholes option pricing model with the weighted average assumptions as follows:

	Six Months Ended
	June 30
	2015
Expected dividend yield		3.72	%
Risk-free interest rate		1.54	%
Expected volatility		30.77	%
Expected term (in years)		7.0
Weighted average fair value of options	$	6.60

Note 3 – Securities

Securities are classified into held-to-maturity and available-for-sale categories. Held-to-maturity (HTM) securities are those that CTBI has the positive intent and ability to hold to maturity and are reported at amortized cost. Available-for-sale (AFS) securities are those that CTBI may decide to sell if needed for liquidity, asset-liability management or other reasons. Available-for-sale securities are reported at fair value, with unrealized gains or losses included as a separate component of equity, net of tax.

The amortized cost and fair value of securities at June 30, 2015 are summarized as follows:

Available-for-Sale

(in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
U.S. Treasury and government agencies	$	182,465	$	587	$	(1,338	)	$	181,714
State and political subdivisions		133,031		2,913		(783	)		135,161
U.S. government sponsored agency mortgage-backed securities		239,017		2,529		(1,982	)		239,564
Total debt securities		554,513		6,029		(4,103	)		556,439
CRA investment funds		25,000		0		(203	)		24,797
Total available-for-sale securities	$	579,513	$	6,029	$	(4,306	)	$	581,236

Held-to-Maturity

(in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
U.S. Treasury and government agencies	$	480	$	0	$	(22	)	$	458
State and political subdivisions		1,181		2		0			1,183
Total held-to-maturity securities	$	1,661	$	2	$	(22	)	$	1,641

The amortized cost and fair value of securities at December 31, 2014 are summarized as follows:

Available-for-Sale

(in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
U.S. Treasury and government agencies	$	190,563	$	509	$	(2,140	)	$	188,932
State and political subdivisions		133,951		3,973		(466	)		137,458
U.S. government sponsored agency mortgage-backed securities		288,881		2,876		(2,850	)		288,907
Total debt securities		613,395		7,358		(5,456	)		615,297
CRA investment funds		25,000		0		(111	)		24,889
Total available-for-sale securities	$	638,395	$	7,358	$	(5,567	)	$	640,186

Held-to-Maturity

(in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
U.S. Treasury and government agencies	$	480	$	0	$	(19	)	$	461
State and political subdivisions		1,182		1		0			1,183
Total held-to-maturity securities	$	1,662	$	1	$	(19	)	$	1,644

The amortized cost and fair value of securities at June 30, 2015 by contractual maturity are shown below. Expected maturities will differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties.

	Available-for-Sale				Held-to-Maturity
(in thousands)	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Due in one year or less	$	22,117	$	22,209	$	0	$	0
Due after one through five years		114,754		115,899		1,181		1,183
Due after five through ten years		127,998		127,897		480		458
Due after ten years		50,627		50,870		0		0
U.S. government sponsored agency mortgage-backed securities		239,017		239,564		0		0
Total debt securities		554,513		556,439		1,661		1,641
CRA investment funds		25,000		24,797		0		0
Total securities	$	579,513	$	581,236	$	1,661	$	1,641

As of June 30, 2015, there was a net gain of $130 thousand realized on sales and calls of AFS securities, consisting of a pre-tax gain of $828 thousand and a pre-tax loss of $698 thousand. As of June 30, 2014, there was a net loss of $111 thousand.

The amortized cost of securities pledged as collateral, to secure public deposits and for other purposes, was $227.3 million at June 30, 2015 and $267.1 million at December 31, 2014.

The amortized cost of securities sold under agreements to repurchase amounted to $272.6 million at June 30, 2015 and $280.9 million at December 31, 2014.

CTBI evaluates its investment portfolio on a quarterly basis for impairment. The analysis performed as of June 30, 2015 indicates that all impairment is considered temporary, market and interest rate driven, and not credit-related. The percentage of total investments with unrealized losses as of June 30, 2015 was 43.6% compared to 44.1% as of December 31, 2014. The following tables provide the amortized cost, gross unrealized losses, and fair market value, aggregated by investment category and length of time the individual securities have been in a continuous unrealized loss position as of June 30, 2015 that are not deemed to be other-than-temporarily impaired.

Available-for-Sale

(in thousands)	Amortized Cost		Gross Unrealized Losses			Fair Value
Less Than 12 Months
U.S. Treasury and government agencies	$	27,878	$	(81	)	$	27,797
State and political subdivisions		31,676		(501	)		31,175
U.S. government sponsored agency mortgage-backed securities		54,031		(642	)		53,389
Total debt securities		113,585		(1,224	)		112,361
CRA investment funds		25,000		(203	)		24,797
Total <12 months temporarily impaired AFS securities		138,585		(1,427	)		137,158

12 Months or More
U.S. Treasury and government agencies		54,772		(1,257	)		53,515
State and political subdivisions		7,316		(282	)		7,034
U.S. government sponsored agency mortgage-backed securities		57,395		(1,340	)		56,055
Total debt securities		119,483		(2,879	)		116,604
CRA investment funds		0		0			0
Total ≥12 months temporarily impaired AFS securities		119,483		(2,879	)		116,604

Total
U.S. Treasury and government agencies		82,650		(1,338	)		81,312
State and political subdivisions		38,992		(783	)		38,209
U.S. government sponsored agency mortgage-backed securities		111,426		(1,982	)		109,444
Total debt securities		233,068		(4,103	)		228,965
CRA investment funds		25,000		(203	)		24,797
Total temporarily impaired AFS securities	$	258,068	$	(4,306	)	$	253,762

Held-to-Maturity

(in thousands)	Amortized Cost		Gross Unrealized Losses			Fair Value
12 Months or More
U.S. Treasury and government agencies	$	480	$	(22	)	$	458
Total temporarily impaired HTM securities	$	480	$	(22	)	$	458

U.S. Treasury and Government Agencies

The unrealized losses in U.S. Treasury and government agencies were caused by interest rate increases. The contractual terms of those investments do not permit the issuer to settle the securities at a price less than amortized cost. CTBI does not consider those investments to be other-than-temporarily impaired at June 30, 2015, because CTBI does not intend to sell the investments and it is not more likely than not that we will be required to sell the investments before recovery of their amortized cost, which may be at maturity.

State and Political Subdivisions

The unrealized losses in securities of state and political subdivisions were caused by interest rate increases. The contractual terms of those investments do not permit the issuer to settle the securities at a price less than amortized cost. CTBI does not consider those investments to be other-than-temporarily impaired at June 30, 2015, because CTBI does not intend to sell the investments before recovery of their amortized cost, which may be at maturity.

U.S. Government Sponsored Agency Mortgage-Backed Securities

The unrealized losses in U.S. government sponsored agency mortgage-backed securities were caused by interest rate increases. CTBI expects to recover the amortized cost basis over the term of the securities. CTBI does not consider those investments to be other-than-temporarily impaired at June 30, 2015, because (i) the decline in market value is attributable to changes in interest rates and not credit quality, (ii) CTBI does not intend to sell the investments, and (iii) it is not more likely than not we will be required to sell the investments before recovery of their amortized cost, which may be at maturity.

CRA Investment Funds

CTBI's CRA investment funds consist of investments in fixed income mutual funds ($24.8 million of the total fair value and $203 thousand of the total unrealized losses in common stock investments). The severity of the impairment (fair value is approximately 0.8% less than cost) and the duration of the impairment correlates with the decline in long-term interest rates in 2015. CTBI evaluated the near-term prospects of these funds in relation to the severity and duration of the impairment. Based on that evaluation, CTBI does not consider those investments to be other-than-temporarily impaired at June 30, 2015.

The analysis performed as of December 31, 2014 indicated that all impairment was considered temporary, market and interest rate driven, and not credit-related. The following tables provide the amortized cost, gross unrealized losses, and fair market value, aggregated by investment category and length of time the individual securities have been in a continuous unrealized loss position as of December 31, 2014 that are not deemed to be other-than-temporarily impaired.

Available-for-Sale

(in thousands)	Amortized Cost		Gross Unrealized Losses			Fair Value
Less Than 12 Months
U.S. Treasury and government agencies	$	31,185	$	(87	)	$	31,098
State and political subdivisions		8,800		(23	)		8,777
U.S. government sponsored agency mortgage-backed securities		50,115		(442	)		49,673
Total debt securities		90,100		(552	)		89,548
CRA investment funds		25,000		(111	)		24,889
Total <12 months temporarily impaired AFS securities		115,100		(663	)		114,437

12 Months or More
U.S. Treasury and government agencies		65,209		(2,053	)		63,156
State and political subdivisions		21,308		(443	)		20,865
U.S. government sponsored agency mortgage-backed securities		86,389		(2,408	)		83,981
Total debt securities		172,906		(4,904	)		168,002
CRA investment funds		0		0			0
Total ≥12 months temporarily impaired AFS securities		172,906		(4,904	)		168,002

Total
U.S. Treasury and government agencies		96,394		(2,140	)		94,254
State and political subdivisions		30,108		(466	)		29,642
U.S. government sponsored agency mortgage-backed securities		136,504		(2,850	)		133,654
Total debt securities		263,006		(5,456	)		257,550
CRA investment funds		25,000		(111	)		24,889
Total temporarily impaired AFS securities	$	288,006	$	(5,567	)	$	282,439

Held-to-Maturity

(in thousands)	Amortized Cost		Gross Unrealized Losses			Fair Value
12 Months or More
U.S. Treasury and government agencies	$	480	$	(19	)	$	461
Total temporarily impaired HTM securities	$	480	$	(19	)	$	461

Note 4 – Loans

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

(in thousands)	June 30 2015		December 31 2014
Commercial construction	$	111,218	$	121,942
Commercial secured by real estate		978,412		948,626
Equipment lease financing		9,859		10,344
Commercial other		363,909		352,048
Real estate construction		57,914		62,412
Real estate mortgage		707,582		712,465
Home equity		88,113		88,335
Consumer direct		121,620		122,136
Consumer indirect		354,204		315,516
Total loans	$	2,792,831	$	2,733,824

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

Commercial construction loans are for the purpose of erecting or rehabilitating buildings or other structures for commercial purposes, including any infrastructure necessary for development. Included in this category are improved property, land development, and tract development loans. The terms of these loans are generally short-term with permanent financing upon completion.

Commercial real estate loans include loans secured by nonfarm, nonresidential properties, 1-4 family/multi-family properties, farmland, and other commercial real estate. These loans are originated based on the borrower's ability to service the debt and secondarily based on the fair value of the underlying collateral.

Equipment lease financing loans are fixed, variable, and tax exempt leases for commercial purposes.

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

Real estate construction loans are typically for owner-occupied properties. The terms of these loans are generally short-term with permanent financing upon completion.

Residential real estate loans are a mixture of fixed rate and adjustable rate first and second lien residential mortgage loans. As a policy, CTBI holds adjustable rate loans and sells the majority of its fixed rate first lien mortgage loans into the secondary market. Changes in interest rates or market conditions may impact a borrower's ability to meet contractual principal and interest payments. Residential real estate loans are secured by real property.

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

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

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

Not included in the loan balances above were loans held for sale in the amount of $2.0 million at June 30, 2015 and $2.3 million at December 31, 2014, respectively.

Refer to note 1 to the condensed consolidated financial statements for further information regarding our nonaccrual policy. Nonaccrual loans segregated by class of loans were as follows:

(in thousands)	June 30 2015		December 31 2014
Commercial:
Commercial construction	$	3,699	$	4,339
Commercial secured by real estate		4,186		6,725
Commercial other		1,326		2,423

Residential:
Real estate construction		500		602
Real estate mortgage		6,556		6,513
Home equity		204		369

Consumer:
Consumer direct		15		0
Total nonaccrual loans	$	16,486	$	20,971

The following tables present CTBI's loan portfolio aging analysis, segregated by class, as of June 30, 2015 and December 31, 2014:

	June 30, 2015
(in thousands)	30-59 Days Past Due		60-89 Days Past Due		90+ Days Past Due		Total Past Due		Current		Total Loans		90+ and Accruing*
Commercial:
Commercial construction	$	13	$	0	$	5,392	$	5,405	$	105,813	$	111,218	$	1,692
Commercial secured by real estate		3,073		984		8,334		12,391		966,021		978,412		5,045
Equipment lease financing		0		0		0		0		9,859		9,859		0
Commercial other		1,298		171		4,033		5,502		358,407		363,909		2,874
Residential:
Real estate construction		33		67		576		676		57,238		57,914		90
Real estate mortgage		1,377		4,739		11,913		18,029		689,553		707,582		6,446
Home equity		1,035		168		563		1,766		86,347		88,113		404
Consumer:
Consumer direct		1,002		358		105		1,465		120,155		121,620		105
Consumer indirect		2,380		585		259		3,224		350,980		354,204		259
Total	$	10,211	$	7,072	$	31,175	$	48,458	$	2,744,373	$	2,792,831	$	16,915

	December 31, 2014
(in thousands)	30-59 Days Past Due		60-89 Days Past Due		90+ Days Past Due		Total Past Due		Current		Total Loans		90+ and Accruing*
Commercial:
Commercial construction	$	40	$	31	$	6,171	$	6,242	$	115,700	$	121,942	$	1,863
Commercial secured by real estate		2,471		1,595		10,763		14,829		933,797		948,626		4,682
Equipment lease financing		0		0		0		0		10,344		10,344		0
Commercial other		826		55		4,205		5,086		346,962		352,048		2,367
Residential:
Real estate construction		92		144		985		1,221		61,191		62,412		383
Real estate mortgage		1,005		5,171		13,049		19,225		693,240		712,465		7,742
Home equity		779		197		703		1,679		86,656		88,335		422
Consumer:
Consumer direct		1,307		295		141		1,743		120,393		122,136		141
Consumer indirect		2,304		586		385		3,275		312,241		315,516		385
Total	$	8,824	$	8,074	$	36,402	$	53,300	$	2,680,524	$	2,733,824	$	17,985

*90+ and Accruing are also included in 90+ Days Past Due column.

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

Commercial construction loans generally are made to customers for the purpose of building income-producing properties. Personal guarantees of the principals are generally required. Such loans are made on a projected cash flow basis and are secured by the project being constructed. Construction loan draw procedures are included in each specific loan agreement, including required documentation items and inspection requirements. Construction loans may convert to term loans at the end of the construction period, or may be repaid by the take-out commitment from another financing source. If the loan is to convert to a term loan, the repayment ability is based on the borrower's projected cash flow. Risk is mitigated during the construction phase by requiring proper documentation and inspections whenever a draw is requested. Loans in amounts greater than $500,000 generally require a performance bond to be posted by the general contractor to assure completion of the project.

Commercial real estate loans are viewed primarily as cash flow loans and secondarily as loans secured by real estate. Commercial real estate lending typically involves higher loan principal amounts and the repayment of these loans is generally dependent on the successful operation of the property securing the loan or the business conducted on the property securing the loan. Commercial real estate loans may be more adversely affected by conditions in the real estate markets or in the general economy. Management monitors and evaluates commercial real estate loans based on collateral and risk grade criteria.

Equipment lease financing is underwritten by our commercial lenders using the same underwriting standards as would be applied to a secured commercial loan requesting 100% financing. The pricing for equipment lease financing is comparable to that of borrowers with similar quality commercial credits with similar collateral. Maximum terms of equipment leasing are determined by the type and expected life of the equipment to be leased. Residual values are determined by appraisals or opinion letters from industry experts. Leases must be in conformity with our consolidated annual tax plan. As we underwrite our equipment lease financing in a manner similar to our commercial loan portfolio described below, the risk characteristics for this portfolio mirror that of the commercial loan portfolio.

Commercial loans are primarily based on the identified cash flows of the borrower and secondarily on the underlying collateral provided by the borrower. The cash flows of borrowers, however, may not be as expected and the collateral securing these loans may fluctuate in value. Most commercial loans are secured by the assets being financed or other business assets such as accounts receivable or inventory and may incorporate a personal guarantee; however, some short-term loans may be made on an unsecured basis. In the case of loans secured by accounts receivable, the availability of funds for the repayment of these loans may be substantially dependent on the ability of the borrower to collect amounts due from its customers.

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

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

The indirect lending area of the bank generally deals with purchasing/funding consumer contracts with new and used automobile dealers. The dealers generate consumer loan applications which are forwarded to the indirect loan processing area for approval or denial. Loan approvals or denials are based on the creditworthiness and repayment ability of the borrower, and on the collateral value. The dealers may have recourse agreements with the Bank.

Credit Quality Indicators:

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

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

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

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

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

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

The following table presents the credit risk profile of CTBI's commercial loan portfolio based on rating category and payment activity, segregated by class of loans, as of June 30, 2015 and December 31, 2014:

(in thousands)	Commercial Construction		Commercial Secured by Real Estate		Equipment Leases		Commercial Other		Total
June 30, 2015
Pass	$	91,970	$	866,899	$	9,859	$	323,470	$	1,292,198
Watch		7,954		70,847		0		32,858		111,659
OAEM		1,939		8,998		0		949		11,886
Substandard		5,656		27,750		0		5,756		39,162
Doubtful		3,699		3,918		0		876		8,493
Total	$	111,218	$	978,412	$	9,859	$	363,909	$	1,463,398

December 31, 2014
Pass	$	101,314	$	834,751	$	10,344	$	307,270	$	1,253,679
Watch		9,857		69,123		0		36,114		115,094
OAEM		934		10,973		0		881		12,788
Substandard		5,647		27,901		0		5,772		39,320
Doubtful		4,190		5,878		0		2,011		12,079
Total	$	121,942	$	948,626	$	10,344	$	352,048	$	1,432,960

The following table presents the credit risk profile of the CTBI's residential real estate and consumer loan portfolios based on performing or nonperforming status, segregated by class, as of June 30, 2015 and December 31, 2014:

(in thousands)	Real Estate Construction		Real Estate Mortgage		Home Equity		Consumer Direct		Consumer Indirect		Total
June 30, 2015
Performing	$	57,324	$	694,580	$	87,505	$	121,500	$	353,945	$	1,314,854
Nonperforming (1)		590		13,002		608		120		259		14,579
Total	$	57,914	$	707,582	$	88,113	$	121,620	$	354,204	$	1,329,433

December 31, 2014
Performing	$	61,427	$	698,210	$	87,544	$	121,995	$	315,131	$	1,284,307
Nonperforming (1)		985		14,255		791		141		385		16,557
Total	$	62,412	$	712,465	$	88,335	$	122,136	$	315,516	$	1,300,864

(1) A loan is considered nonperforming if it is 90 days or more past due and/or on nonaccrual.

The total of consumer mortgage loans secured by real estate properties for which formal foreclosure proceedings are in process totaled $6.3 million at June 30, 2015 compared to $5.9 million at December 31, 2014.

A loan is considered impaired, in accordance with the impairment accounting guidance, when based on current information and events, it is probable CTBI will be unable to collect all amounts due from the borrower in accordance with the contractual terms of the loan. Impaired loans include nonperforming commercial loans but also include loans modified in troubled debt restructurings where concessions have been granted to borrowers experiencing financial difficulties. These concessions could include a reduction in the interest rate on the loan, payment extensions, forgiveness of principal, forbearance, or other actions intended to maximize collection.

The following tables present impaired loans, the average investment in impaired loans, and interest income recognized on impaired loans for the periods ended June 30, 2015, December 31, 2014, and June 30, 2014:

	June 30, 2015
(in thousands)	Recorded Balance		Unpaid Contractual Principal Balance		Specific Allowance
Loans without a specific valuation allowance:
Commercial construction	$	5,211	$	5,211	$	0
Commercial secured by real estate		29,951		31,340		0
Commercial other		7,262		8,898		0
Real estate mortgage		1,185		1,185		0

Loans with a specific valuation allowance:
Commercial construction		3,500		3,500		719
Commercial secured by real estate		2,377		2,560		529
Commercial other		687		809		215

Totals:
Commercial construction		8,711		8,711		719
Commercial secured by real estate		32,328		33,900		529
Commercial other		7,949		9,707		215
Real estate mortgage		1,185		1,185		0
Total	$	50,173	$	53,503	$	1,463

	Three Months Ended				Six Months Ended
	June 30, 2015				June 30, 2015
(in thousands)	Average Investment in Impaired Loans		*Interest Income Recognized		Average Investment in Impaired Loans		*Interest Income Recognized
Loans without a specific valuation allowance:
Commercial construction	$	5,266	$	68	$	5,282	$	119
Commercial secured by real estate		30,366		359		30,179		669
Commercial other		7,367		67		10,118		128
Real estate mortgage		1,186		12		1,044		24

Loans with a specific valuation allowance:
Commercial construction		3,796		0		3,846		0
Commercial secured by real estate		2,452		0		2,946		1
Commercial other		729		0		794		0

Totals:
Commercial construction		9,062		68		9,128		119
Commercial secured by real estate		32,818		359		33,125		670
Commercial other		8,096		67		10,912		128
Real estate mortgage		1,186		12		1,044		24
Total	$	51,162	$	506	$	54,209	$	941

	December 31, 2014
(in thousands)	Recorded Balance		Unpaid Contractual Principal Balance		Specific Allowance		Average Investment in Impaired Loans		*Interest Income Recognized
Loans without a specific valuation allowance:
Commercial construction	$	5,653	$	5,654	$	0	$	5,415	$	205
Commercial secured by real estate		31,639		33,268		0		34,650		1,180
Commercial other		13,069		14,597		0		15,663		783
Real estate mortgage		1,277		1,277		0		1,507		53

Loans with a specific valuation allowance:
Commercial construction		3,974		3,974		734		4,216		0
Commercial secured by real estate		2,718		2,876		827		4,376		11
Commercial other		738		862		181		531		1

Totals:
Commercial construction		9,627		9,628		734		9,631		205
Commercial secured by real estate		34,357		36,144		827		39,026		1,191
Commercial other		13,807		15,459		181		16,194		784
Real estate mortgage		1,277		1,277		0		1,507		53
Total	$	59,068	$	62,508	$	1,742	$	66,358	$	2,233

	June 30, 2014
(in thousands)	Recorded Balance		Unpaid Contractual Principal Balance		Specific Allowance
Loans without a specific valuation allowance:
Commercial construction	$	5,270	$	5,271	$	0
Commercial secured by real estate		33,504		34,523		0
Commercial other		16,947		18,527		0
Real estate mortgage		1,865		1,865		0

Loans with a specific valuation allowance:
Commercial construction		4,285		4,285		734
Commercial secured by real estate		3,968		4,272		1,077
Commercial other		339		463		84

Totals:
Commercial construction		9,555		9,556		734
Commercial secured by real estate		37,472		38,795		1,077
Commercial other		17,286		18,990		84
Real estate mortgage		1,865		1,865		0
Total	$	66,178	$	69,206	$	1,895

	Three Months Ended				Six Months Ended
	June 30, 2014				June 30, 2014
(in thousands)	Average Investment in Impaired Loans		*Interest Income Recognized		Average Investment in Impaired Loans		*Interest Income Recognized
Loans without a specific valuation allowance:
Commercial construction	$	5,291	$	78	$	5,366	$	128
Commercial secured by real estate		33,687		332		35,051		597
Commercial other		17,362		257		15,843		371
Real estate mortgage		1,866		22		1,445		32

Loans with a specific valuation allowance:
Commercial construction		4,285		0		4,299		0
Commercial secured by real estate		3,973		0		4,330		4
Commercial other		353		0		396		0

Totals:
Commercial construction		9,576		78		9,665		128
Commercial secured by real estate		37,660		332		39,381		601
Commercial other		17,715		257		16,239		371
Real estate mortgage		1,866		22		1,445		32
Total	$	66,817	$	689	$	66,730	$	1,132

*Cash basis interest is substantially the same as interest income recognized.

Included in certain loan categories of impaired loans are certain loans and leases that have been modified in a troubled debt restructuring, where economic concessions have been granted to borrowers who have experienced financial difficulties. These concessions typically result from our loss mitigation activities and could include reductions in the interest rate, payment extensions, forgiveness of principal, forbearance or other actions. Modifications of terms for our loans and their inclusion as troubled debt restructurings are based on individual facts and circumstances. Loan modifications that are included as troubled debt restructurings may involve either an increase or reduction of the interest rate, extension of the term of the loan, or deferral of principal and/or interest payments, regardless of the period of the modification. All of the loans identified as troubled debt restructuring were modified due to financial stress of the borrower. In order to determine if a borrower is experiencing financial difficulty, an evaluation is performed to determine the probability that the borrower will be in payment default on any of its debt in the foreseeable future without the modification. This evaluation is performed under CTBI's internal underwriting policy.

When we modify loans and leases in a troubled debt restructuring, we evaluate any possible impairment similar to other impaired loans based on the present value of expected future cash flows, discounted at the contractual interest rate of the original loan or lease agreement, or use the current fair value of the collateral, less selling costs for collateral dependent loans. If we determined that the value of the modified loan is less than the recorded investment in the loan (net of previous charge-offs, deferred loan fees or costs and unamortized premium or discount), impairment is recognized through an allowance estimate or a charge-off to the allowance. In periods subsequent to modification, we evaluate all troubled debt restructuring, including those that have payment defaults, for possible impairment and recognize impairment through the allowance.

During 2015, certain loans were modified in troubled debt restructurings, where economic concessions were granted to borrowers consisting of reductions in the interest rates, payment extensions, forgiveness of principal, and forbearances. Presented below, segregated by class of loans, are troubled debt restructurings that occurred during the three and six months ended June 30, 2015 and 2014 and the year ended December 31, 2014:

	Three Months Ended June 30, 2015
(in thousands)	Number of Loans		Term Modification		Rate Modification		Combination		Post-Modification Outstanding Balance
Commercial:
Commercial secured by real estate		4	$	317	$	0	$	0	$	317
Commercial other		1		18		0		0		18
Residential:
Real estate mortgage		1		0		0		290		290
Total troubled debt restructurings		6	$	335	$	0	$	290	$	625

	Six Months Ended June 30, 2015
(in thousands)	Number of Loans		Term Modification		Rate Modification		Combination		Post-Modification Outstanding Balance
Commercial:
Commercial secured by real estate		8	$	607	$	0	$	0	$	607
Commercial other		3		54		0		0		54
Residential:
Real estate mortgage		1		0		0		290		290
Total troubled debt restructurings		12	$	661	$	0	$	290	$	951

	Three Months Ended June 30, 2014
(in thousands)	Number of Loans		Term Modification		Rate Modification		Combination		Post-Modification Outstanding Balance
Commercial:
Commercial secured by real estate		1	$	106	$	0	$	0	$	106
Commercial other		1		20		0		0		20
Residential:
Real estate mortgage		2		0		0		849		849
Total troubled debt restructurings		4	$	126	$	0	$	849	$	975

	Six Months Ended June 30, 2014
(in thousands)	Number of Loans		Term Modification		Rate Modification		Combination		Post-Modification Outstanding Balance
Commercial:
Commercial secured by real estate		3	$	231	$	0	$	0	$	231
Commercial other		3		61		0		0		61
Residential:
Real estate mortgage		2		0		0		849		849
Total troubled debt restructurings		8	$	292	$	0	$	849	$	1,141

	Year Ended December 31, 2014
(in thousands)	Number of Loans		Term Modification		Rate Modification		Combination		Post-Modification Outstanding Balance
Commercial:
Commercial construction		1	$	7	$	0	$	0	$	7
Commercial secured by real estate		11		5,707		0		68		5,775
Commercial other		8		1,268		0		0		1,268
Residential:
Real estate mortgage		2		0		0		848		848
Total troubled debt restructurings		22	$	6,982	$	0	$	916	$	7,898

No charge-offs have resulted from modifications for any of the presented periods.

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 in a troubled debt restructuring are closely monitored for delinquency as an early indicator of possible future default. If loans modified in a troubled debt restructuring subsequently default, CTBI evaluates the loan for possible further impairment. The allowance for loan 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. Presented below, segregated by class of loans, are loans that were modified as troubled debt restructurings within the past twelve months which have subsequently defaulted. CTBI generally considers a loan in default when it is 90 days or more past due or transferred to nonaccrual.

(in thousands)	Three Months Ended June 30, 2015				Six Months Ended June 30, 2015
	Number of Loans		Recorded Balance		Number of Loans		Recorded Balance
Commercial:
Commercial secured by real estate		1	$	98		2	$	359
Residential:
Real estate mortgage		1		290		1		290
Total defaulted restructured loans		2	$	388		3	$	649

(in thousands)	Three Months Ended June 30, 2014				Six Months Ended June 30, 2014
	Number of Loans		Recorded Balance		Number of Loans		Recorded Balance
Commercial:
Commercial other		0	$	0		2	$	34
Residential:
Real estate mortgage		1		581		1		581
Total defaulted restructured loans		1	$	581		3	$	615

Note 5 – Allowance for Loan and Lease Losses

The following tables present the balance in the allowance for loan and lease losses ("ALLL") and the recorded investment in loans based on portfolio segment and impairment method for the three and six months ended June 30, 2015 and 2014 and the twelve months ended December 31, 2014:

	Three Months Ended June 30, 2015
(in thousands)	Commercial Construction			Commercial Secured by Real Estate			Equipment Lease Financing			Commercial Other		Real Estate Construction		Real Estate Mortgage		Home Equity		Consumer Direct		Consumer Indirect		Total
Allowance for loan losses
Beginning balance	$	2,864		$	13,860		$	125		$	4,125	$	519	$	6,030	$	742	$	1,521	$	4,820	$	34,606
Provision charged to expense		(244	)		(346	)		(12	)		846		48		1,095		149		222		561		2,319
Losses charged off		1			493			0			623		0		175		25		308		659		2,284
Recoveries		3			1			0			66		3		15		1		106		354		549
Ending balance	$	2,622		$	13,022		$	113		$	4,414	$	570	$	6,965	$	867	$	1,541	$	5,076	$	35,190

Ending balance:
Individually evaluated for impairment	$	719		$	529		$	0		$	215	$	0	$	0	$	0	$	0	$	0	$	1,463
Collectively evaluated for impairment	$	1,903		$	12,493		$	113		$	4,199	$	570	$	6,965	$	867	$	1,541	$	5,076	$	33,727

Loans
Ending balance:
Individually evaluated for impairment	$	8,711		$	32,328		$	0		$	7,949	$	0	$	1,185	$	0	$	0	$	0	$	50,173
Collectively evaluated for impairment	$	102,507		$	946,084		$	9,859		$	355,960	$	57,914	$	706,397	$	88,113	$	121,620	$	354,204	$	2,742,658

	Six Months Ended June 30, 2015
(in thousands)	Commercial Construction			Commercial Secured by Real Estate		Equipment Lease Financing			Commercial Other		Real Estate Construction		Real Estate Mortgage		Home Equity		Consumer Direct		Consumer Indirect		Total
Allowance for loan losses
Beginning balance	$	2,896		$	13,618	$	119		$	4,263	$	534	$	6,094	$	756	$	1,574	$	4,593	$	34,447
Provision charged to expense		(278	)		284		(6	)		901		123		1,459		166		422		1,149		4,220
Losses charged off		2			926		0			1,064		90		613		67		665		1,493		4,920
Recoveries		6			46		0			314		3		25		12		210		827		1,443
Ending balance	$	2,622		$	13,022	$	113		$	4,414	$	570	$	6,965	$	867	$	1,541	$	5,076	$	35,190

Ending balance:
Individually evaluated for impairment	$	719		$	529	$	0		$	215	$	0	$	0	$	0	$	0	$	0	$	1,463
Collectively evaluated for impairment	$	1,903		$	12,493	$	113		$	4,199	$	570	$	6,965	$	867	$	1,541	$	5,076	$	33,727

Loans
Ending balance:
Individually evaluated for impairment	$	8,711		$	32,328	$	0		$	7,949	$	0	$	1,185	$	0	$	0	$	0	$	50,173
Collectively evaluated for impairment	$	102,507		$	946,084	$	9,859		$	355,960	$	57,914	$	706,397	$	88,113	$	121,620	$	354,204	$	2,742,658

	Three Months Ended June 30, 2014
(in thousands)	Commercial Construction			Commercial Secured by Real Estate		Equipment Lease Financing			Commercial Other		Real Estate Construction		Real Estate Mortgage		Home Equity		Consumer Direct		Consumer Indirect		Total
Allowance for loan losses
Beginning balance	$	3,107		$	14,183	$	107		$	4,754	$	442	$	5,143	$	626	$	1,573	$	3,680	$	33,615
Provision charged to expense		(194	)		340		(5	)		113		123		48		17		62		231		735
Losses charged off		0			296		0			272		116		57		1		229		658		1,629
Recoveries		3			175		0			82		1		8		1		191		435		896
Ending balance	$	2,916		$	14,402	$	102		$	4,677	$	450	$	5,142	$	643	$	1,597	$	3,688	$	33,617

Ending balance:
Individually evaluated for impairment	$	734		$	1,077	$	0		$	84	$	0	$	0	$	0	$	0	$	0	$	1,895
Collectively evaluated for impairment	$	2,182		$	13,325	$	102		$	4,593	$	450	$	5,142	$	643	$	1,597	$	3,688	$	31,722

Loans
Ending balance:
Individually evaluated for impairment	$	9,555		$	37,472	$	0		$	17,286	$	0	$	1,865	$	0	$	0	$	0	$	66,178
Collectively evaluated for impairment	$	103,865		$	868,524	$	7,928		$	337,658	$	61,184	$	696,538	$	87,279	$	119,610	$	283,845	$	2,566,431

	Six Months Ended June 30, 2014
(in thousands)	Commercial Construction			Commercial Secured by Real Estate		Equipment Lease Financing			Commercial Other		Real Estate Construction		Real Estate Mortgage		Home Equity		Consumer Direct		Consumer Indirect		Total
Allowance for loan losses
Beginning balance	$	3,396		$	14,535	$	121		$	5,238	$	397	$	4,939	$	601	$	1,127	$	3,654	$	34,008
Provision charged to expense		(490	)		234		(19	)		100		167		404		68		815		801		2,080
Losses charged off		0			618		0			905		116		221		28		682		1,604		4,174
Recoveries		10			251		0			244		2		20		2		337		837		1,703
Ending balance	$	2,916		$	14,402	$	102		$	4,677	$	450	$	5,142	$	643	$	1,597	$	3,688	$	33,617

Ending balance:
Individually evaluated for impairment	$	734		$	1,077	$	0		$	84	$	0	$	0	$	0	$	0	$	0	$	1,895
Collectively evaluated for impairment	$	2,182		$	13,325	$	102		$	4,593	$	450	$	5,142	$	643	$	1,597	$	3,688	$	31,722

Loans
Ending balance:
Individually evaluated for impairment	$	9,555		$	37,472	$	0		$	17,286	$	0	$	1,865	$	0	$	0	$	0	$	66,178
Collectively evaluated for impairment	$	103,865		$	868,524	$	7,928		$	337,658	$	61,184	$	696,538	$	87,279	$	119,610	$	283,845	$	2,566,431

	December 31, 2014
(in thousands)	Commercial Construction			Commercial Secured by Real Estate		Equipment Lease Financing			Commercial Other		Real Estate Construction		Real Estate Mortgage		Home Equity		Consumer Direct		Consumer Indirect		Total
Allowance for loan losses
Beginning balance	$	3,396		$	14,535	$	121		$	5,238	$	397	$	4,939	$	601	$	1,127	$	3,654	$	34,008
Provision charged to expense		(513	)		941		(2	)		1,545		258		2,173		265		1,207		2,881		8,755
Losses charged off		15			2,163		0			3,141		123		1,058		115		1,326		3,495		11,436
Recoveries		28			305		0			621		2		40		5		566		1,553		3,120
Ending balance	$	2,896		$	13,618	$	119		$	4,263	$	534	$	6,094	$	756	$	1,574	$	4,593	$	34,447

Ending balance:
Individually evaluated for impairment	$	734		$	827	$	0		$	181	$	0	$	0	$	0	$	0	$	0	$	1,742
Collectively evaluated for impairment	$	2,162		$	12,791	$	119		$	4,082	$	534	$	6,094	$	756	$	1,574	$	4,593	$	32,705

Loans
Ending balance:
Individually evaluated for impairment	$	9,627		$	34,357	$	0		$	13,807	$	0	$	1,277	$	0	$	0	$	0	$	59,068
Collectively evaluated for impairment	$	112,315		$	914,269	$	10,344		$	338,241	$	62,412	$	711,188	$	88,335	$	122,136	$	315,516	$	2,674,756

Note 6 – Other Real Estate Owned

Activity for other real estate owned was as follows:

	Three Months Ended						Six Months Ended
	June 30						June 30
(in thousands)	2015			2014			2015			2014
Beginning balance of other real estate owned	$	38,735		$	36,299		$	36,776		$	39,188
New assets acquired		691			2,196			6,261			3,464
Capitalized costs		0			0			85			0
Fair value adjustments		(299	)		(287	)		(363	)		(1,161	)
Sale of assets		(2,429	)		(5,146	)		(6,061	)		(8,429	)
Ending balance of other real estate owned	$	36,698		$	33,062		$	36,698		$	33,062

Foreclosed properties at June 30, 2015 and 2014 were $36.4 million and $33.1 million, respectively. Also included in other real estate owned at June 30, 2015 is a $0.3 million property which was not acquired through foreclosure. Carrying costs and fair value adjustments associated with foreclosed properties for the three months ended June 30, 2015 and 2014 were $0.8 million and $0.7 million, respectively. Carrying costs and fair value adjustments associated with foreclosed properties for the six months ended June 30, 2015 and 2014 were $1.2 million and $2.2 million.

Note 7 – Repurchase Agreements

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

We monitor collateral levels on a continuous basis and maintain records of each transaction specifically describing the applicable security and the counterparty's fractional interest in that security, and we segregate the security from its general assets in accordance with regulations governing custodial holdings of securities. The primary risk with our repurchase agreements is market risk associated with the securities securing the transactions, as we may be required to provide additional collateral based on fair value changes of the underlying securities. Securities pledged as collateral under repurchase agreements are maintained with our safekeeping agents. The carrying value of investment securities available for sale pledged as collateral under repurchase agreements totaled $275.3 million and $283.3 million at June 30, 2015 and December 31, 2014, respectively.

The remaining contractual maturity of the securities sold under agreements to repurchase by class of collateral pledged included in the accompanying consolidated balance sheets as of June 30, 2015 and December 31, 2014 is presented in the following tables:

	June 30, 2015
	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	$	18,283	$	4,600	$	13,063	$	11,171	$	47,117
State and political subdivisions		61,151		3,937		1,724		7,266		74,078
U.S. government sponsored agency mortgage-backed securities		33,429		13,463		21,029		52,660		120,581
Total	$	112,863	$	22,000	$	35,816	$	71,097	$	241,776

	December 31, 2014
	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	$	6,790	$	1,000	$	6,834	$	14,076	$	28,700
State and political subdivisions		59,451		0		1,839		12,474		73,764
U.S. government sponsored agency mortgage-backed securities		39,315		0		15,871		77,536		132,722
Total	$	105,556	$	1,000	$	24,544	$	104,086	$	235,186

Note 8 – Fair Market Value of Financial Assets and Liabilities

Fair Value Measurements

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

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

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

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

Recurring Measurements

The following tables present the fair value measurements of assets recognized in the accompanying balance sheets measured at fair value on a recurring basis as of June 30, 2015 and December 31, 2014 and indicate the level within the fair value hierarchy of the valuation techniques.

			Fair Value Measurements at June 30, 2015 Using
(in thousands)	Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets measured – recurring basis
Available-for-sale securities:
U.S. Treasury and government agencies	$	181,714	$	497	$	181,217	$	0
State and political subdivisions		135,161		0		135,161		0
U.S. government sponsored agency mortgage-backed securities		239,564		0		239,564		0
CRA investment funds		24,797		24,797		0		0
Mortgage servicing rights		3,235		0		0		3,235

			Fair Value Measurements at December 31, 2014 Using
(in thousands)	Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets measured – recurring basis
Available-for-sale securities:
U.S. Treasury and government agencies	$	188,932	$	492	$	188,440	$	0
State and political subdivisions		137,458		0		137,458		0
U.S. government sponsored agency mortgage-backed securities		288,907		0		288,907		0
CRA investment funds		24,889		24,889		0		0
Mortgage servicing rights		2,968		0		0		2,968

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 at fair value as of June 30, 2015 and December 31, 2014. There have been no significant changes in the valuation techniques during the quarter ended June 30, 2015. For assets classified within Level 3 of the fair value hierarchy, the process used to develop the reported fair value is described below.

Available-for-Sale Securities

Securities classified as available-for-sale are reported at fair value on a recurring basis. U.S. Treasury and government agencies and CTBI's CRA investment funds are classified as Level 1 of the valuation hierarchy where quoted market prices are available in the active market on which the individual securities are traded.

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

In certain cases where Level 1 or Level 2 inputs are not available, securities are classified within Level 3 of the hierarchy. Fair value determinations for Level 3 measurements are estimated on a quarterly basis where assumptions used are reviewed to ensure the estimated fair value complies with accounting standards generally accepted in the United States. As of June 30, 2015, CTBI does not own any securities classified as Level 3 inputs.

Mortgage Servicing Rights

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

In determining fair value, CTBI utilizes the expertise of an independent third party. Accordingly, fair value is determined by the independent third party by utilizing 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 are classified within Level 3 of the hierarchy. Fair value determinations for Level 3 measurements of mortgage servicing rights are tested for impairment on a quarterly basis where assumptions used are reviewed to ensure the estimated fair value complies with accounting standards generally accepted in the United States. See the table below for inputs and valuation techniques used for Level 3 mortgage servicing rights.

Transfers between Levels

There were no transfers between Levels 1, 2, and 3 as of June 30, 2015.

Level 3 Reconciliation

Following is a reconciliation of the beginning and ending balances of recurring fair value measurements recognized in the accompanying balance sheet using significant unobservable (Level 3) inputs for the three and six months ended June 30, 2015 and 2014:

Mortgage Servicing Rights
	Three Months Ended						Six Months Ended
	June 30						June 30
(in thousands)	2015			2014			2015			2014
Beginning balance	$	2,797		$	3,258		$	2,968		$	3,424
Total recognized gains (losses)
Included in net income		446			(166	)		285			(292	)
Issues		213			82			297			145
Settlements		(221	)		(112	)		(315	)		(215	)
Ending balance	$	3,235		$	3,062		$	3,235		$	3,062

Total gains (losses) for the period included in net income attributable to the change in unrealized gains or losses related to assets still held at the reporting date	$	446		$	(166	)	$	285		$	(292	)

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

Noninterest Income
	Three Months Ended					Six Months Ended
	June 30					June 30
(in thousands)	2015		2014			2015			2014
Total gains (losses)	$	225	$	(278	)	$	(30	)	$	(507	)

Nonrecurring Measurements

The following tables present the fair value measurements of assets recognized in the accompanying balance sheets measured at fair value on a nonrecurring basis as of June 30, 2015 and December 31, 2014 and indicate the level within the fair value hierarchy of the valuation techniques.

			Fair Value Measurements at June 30, 2015 Using
(in thousands)	Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets measured – nonrecurring basis
Impaired loans (collateral dependent)	$	2,677	$	0	$	0	$	2,677
Other real estate/assets owned		1,070		0		0		1,070

			Fair Value Measurements at December 31, 2014 Using
(in thousands)	Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets measured – nonrecurring basis
Impaired loans (collateral dependent)	$	4,665	$	0	$	0	$	4,665
Other real estate/assets owned		6,472		0		0		6,472

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

Impaired Loans (Collateral Dependent)

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

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

Loans considered impaired under ASC 310-35, Impairment of a Loan, are loans for which, based on current information and events, it is probable that the creditor will be unable to collect all amounts due according to the contractual terms of the loan agreement. Impaired loans are subject to nonrecurring fair value adjustments to reflect subsequent (i) partial write-downs that are based on the observable market price or current appraised value of the collateral or (ii) the full charge-off of the loan carrying value. Quarter-to-date fair value adjustments on impaired loans disclosed above were decreases of $15 thousand, $0.3 million, and $38 thousand for the quarters ended June 30, 2015, December 31, 2014, and June 30, 2014, respectively. Year-to-date adjustments were decreases of $0.5 million for the six months ended June 30, 2015 and $0.4 million for the year ended December 31, 2014 and an increase of $0.2 million for the six months ended June 30, 2014.

Other Real Estate Owned

In accordance with the provisions of ASC 360, Property, Plant, and Equipment, other real estate owned (OREO) is carried at the lower of fair value at acquisition date or current estimated fair value, less estimated cost to sell when the real estate is acquired. Estimated fair value of 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. Quarter-to-date fair value adjustments on other real estate/assets owned were decreases of $0.3 million, $1.5 million, and $0.3 million for the quarters ended June 30, 2015, December 31, 2014, and June 30, 2014, respectively. Year-to-date adjustments were decreases of $0.4 million for the six months ended June 30, 2015, $1.7 million for the year ended December 31, 2014, and $1.2 million for the six months ended June 30, 2014.

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

The following tables present quantitative information about unobservable inputs used in recurring and nonrecurring Level 3 fair value measurements at June 30, 2015 and December 31, 2014.

(in thousands)	Quantitative Information about Level 3 Fair Value Measurements
	Fair Value at June 30, 2015		Valuation Technique(s)	Unobservable Input	Range (Weighted Average)
Mortgage servicing rights	$	3,235	Discount cash flows, computer pricing model	Constant prepayment rate		6.0% - 22.3% (9.8%)
				Probability of default		0.0% - 100.0% (3.0%)
				Discount rate		10.0% - 11.0% (10.1%)

Impaired loans (collateral-dependent)	$	2,677	Market comparable properties	Marketability discount		5.0% - 10.0% (7.0%)

Other real estate/assets owned	$	1,070	Market comparable properties	Comparability adjustments		5.0% - 30.0% (12.1%)

(in thousands)	Quantitative Information about Level 3 Fair Value Measurements
	Fair Value at December 31, 2014		Valuation Technique(s)	Unobservable Input	Range (Weighted Average)
Mortgage servicing rights	$	2,968	Discount cash flows, computer pricing model	Constant prepayment rate		4.6% - 25.1% (11.3%)
				Probability of default		0.0% - 100.0% (3.6%)
				Discount rate		10.0% - 11.5% (10.1%)

Impaired loans (collateral-dependent)	$	4,665	Market comparable properties	Marketability discount		5.0% - 10.0% (7.0%)

Other real estate/assets owned	$	6,472	Market comparable properties	Comparability adjustments		3.0% - 67.0% (18.0%)

Sensitivity of Significant Unobservable Inputs

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

Mortgage Servicing Rights

Market value for mortgage servicing rights 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.

Fair Value of Financial Instruments

The following table presents estimated fair value of CTBI's financial instruments as of June 30, 2015 and indicates the level within the fair value hierarchy of the valuation techniques.

			Fair Value Measurements at June 30, 2015 Using
(in thousands)	Carrying Amount		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Financial assets:
Cash and cash equivalents	$	145,031	$	145,031	$	0	$	0
Certificates of deposit in other banks		6,665		0		6,675		0
Securities available-for-sale		581,236		25,294		555,942		0
Securities held-to-maturity		1,661		0		1,641		0
Loans held for sale		1,993		2,019		0		0
Loans, net		2,757,641		0		0		2,753,742
Federal Home Loan Bank stock		17,927		0		17,927		0
Federal Reserve Bank stock		4,887		0		4,887		0
Accrued interest receivable		12,801		0		12,801		0
Mortgage servicing rights		3,235		0		0		3,235

Financial liabilities:
Deposits	$	2,913,071	$	701,958	$	2,204,811	$	0
Repurchase agreements		241,776		0		0		241,765
Federal funds purchased		12,220		0		12,220		0
Advances from Federal Home Loan Bank		51,112		0		51,037		0
Long-term debt		61,341		0		0		49,073
Accrued interest payable		1,336		0		1,336		0

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

The following table presents estimated fair value of CTBI's financial instruments as of December 31, 2014 and indicates the level within the fair value hierarchy of the valuation techniques.

(in thousands)			Fair Value Measurements at December 31, 2014 Using
	Carrying Amount		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Financial assets:
Cash and cash equivalents	$	105,517	$	105,517	$	0	$	0
Certificates of deposit in other banks		8,197		0		8,213		0
Securities available-for-sale		640,186		25,381		614,805		0
Securities held-to-maturity		1,662		0		1,644		0
Loans held for sale		2,264		2,321		0		0
Loans, net		2,699,377		0		0		2,691,906
Federal Home Loan Bank stock		17,927		0		17,927		0
Federal Reserve Bank stock		4,869		0		4,869		0
Accrued interest receivable		13,548		0		13,548		0
Mortgage servicing rights		2,968		0		0		2,968

Financial liabilities:
Deposits	$	2,874,257	$	677,626	$	2,192,848	$	0
Repurchase agreements		235,186		0		0		235,193
Federal funds purchased		11,041		0		11,041		0
Advances from Federal Home Loan Bank		61,170		0		61,106		0
Long-term debt		61,341		0		0		35,615
Accrued interest payable		908		0		908		0

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

The following methods and assumptions were used to estimate the fair value of each class of financial instruments for which it is practicable to estimate that value:

Cash and cash equivalents – The carrying amount approximates fair value.

Certificates of deposit in other banks – Fair values are based on quoted market prices or dealer quotes for similar instruments.

Securities held-to-maturity – Fair values are based on quoted market prices, if available. If a quoted price is not available, fair value is estimated using quoted prices for similar securities. The fair value estimate is provided to management from a third party using modeling assumptions specific to each type of security that are reviewed and approved by management. Quarterly sampling of fair values provided by additional third parties supplement the fair value review process.

Loans held for sale – The fair value is predetermined at origination based on sale price.

Loans (net of the allowance for loan and lease losses) – The fair value of fixed rate loans and variable rate mortgage loans is estimated by discounting the future cash flows using current rates at which similar loans would be made to borrowers with similar credit ratings and for the same remaining maturities. For other variable rate loans, the carrying amount approximates fair value.

Federal Home Loan Bank stock – The carrying value of Federal Home Loan Bank stock approximates fair value based on the redemption provisions of the Federal Home Loan Bank.

Federal Reserve Bank stock – The carrying value of Federal Reserve Bank stock approximates fair value based on the redemption provisions of the Federal Reserve Bank.

Accrued interest receivable – The carrying amount approximates fair value.

Deposits – The fair value of fixed maturity time deposits is estimated by discounting the future cash flows using the rates currently offered for deposits of similar remaining maturities. For deposits including demand deposits, savings accounts, NOW accounts, and certain money market accounts, the carrying value approximates fair value.

Repurchase agreements – The fair value is estimated by discounting future cash flows using current rates.

Federal funds purchased – The carrying amount approximates fair value.

Advances from Federal Home Loan Bank – The fair value of these fixed-maturity advances is estimated by discounting future cash flows using rates currently offered for advances of similar remaining maturities.

Long-term debt – The fair value is estimated by discounting future cash flows using current rates.

Accrued interest payable – The carrying amount approximates fair value.

Commitments to originate loans, forward sale commitments, letters of credit, and lines of credit – The fair value of commitments to originate loans is estimated using the fees currently charged to enter into similar agreements, taking into account the remaining terms of the agreements and the present creditworthiness of the counterparties. For fixed-rate loan commitments, fair value also considers the difference between current levels of interest rates and the committed rates. The fair value of forward sale commitments is estimated based on current market prices for loans of similar terms and credit quality. The fair values of letters of credit and lines of credit are based on fees currently charged for similar agreements or on the estimated cost to terminate or otherwise settle the obligations with the counterparties at the reporting date. The fair values of these commitments are not material.

Note 9 – Earnings Per Share

The following table sets forth the computation of basic and diluted earnings per share:

	Three Months Ended				Six Months Ended
	June 30				June 30
(in thousands except per share data)	2015		2014		2015		2014
Numerator:
Net income	$	12,402	$	12,195	$	23,340	$	22,335

Denominator:
Basic earnings per share:
Weighted average shares		17,421		17,318		17,411		17,313
Diluted earnings per share:
Effect of dilutive stock options and restricted stock grants		44		75		47		80
Adjusted weighted average shares		17,465		17,393		17,458		17,393

Earnings per share:
Basic earnings per share	$	0.71	$	0.70	$	1.34	$	1.29
Diluted earnings per share		0.71		0.70		1.34		1.28

Options to purchase 58,063 common shares at a weighted average price of $35.409 were excluded from the diluted calculations above for the three and six months ended June 30, 2015, because the exercise prices on the options were greater than the average market price for the period. In addition to in-the-money stock options, unvested restricted stock grants were also used in the calculation of diluted earnings per share based on the treasury method. Options to purchase 65,519 common shares at a weighted average price of $35.409 were excluded from the diluted calculations above for the three months ended June 30, 2014. There were no options to purchase common shares that were excluded from the diluted calculations above for the six months ended June 30, 2014.

Note 10 – Accumulated Other Comprehensive Income

Unrealized gains (losses) on AFS securities

Amounts reclassified from accumulated other comprehensive income (AOCI) and the affected line items in the statements of income during the three and six months ended June 30, 2015 and 2014 were:

	Amounts Reclassified from AOCI
(in thousands)	Three Months Ended June 30						Six Months Ended June 30
(in thousands)	2015			2014			2015		2014
Affected line item in the statements of income
Securities gains (losses)	$	(14	)	$	(51	)	$	130	$	(111	)
Tax expense (benefit)		(5	)		(18	)		45		(39	)
Total reclassifications out of AOCI	$	(9	)	$	(33	)	$	85	$	(72	)

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., 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 contained in this quarterly report. The MD&A includes the following sections:

v Our Business

v Results of Operations and Financial Condition

v Dividends

v Liquidity and Market Risk

v Interest Rate Risk

v Capital Resources

v Impact of Inflation, Changing Prices, and Economic Conditions

v Stock Repurchase Program

v Critical Accounting Policies and Estimates

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, Inc. Through our subsidiaries, we have eighty banking locations in eastern, northeastern, central, and south central Kentucky, southern West Virginia, and northeastern Tennessee, four trust offices across Kentucky, and one trust office in northeastern Tennessee. At June 30, 2015, we had total consolidated assets of $3.8 billion and total consolidated deposits, including repurchase agreements, of $3.2 billion. Total shareholders' equity at June 30, 2015 was $461.6 million. Trust assets under management, which are excluded from CTBI's total consolidated assets, at June 30, 2015 were $1.9 billion.

Through its 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. Lease-financing, 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 registrars, transfer agents, and 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, 2014.

Results of Operations and Financial Condition

For the quarter ended June 30, 2015, we reported earnings of $12.4 million, or $0.71 per basic share, compared to $12.2 million, or $0.70 per basic share, earned during the second quarter 2014 and $10.9 million, or $0.63 per basic share, earned during the first quarter 2015. Earnings for the six months ended June 30, 2015 were $23.3 million, or $1.34 per basic share compared to $22.3 million, or $1.29 per basic share, for the six months ended June 30, 2014.

Quarterly Highlights

v	Our loan portfolio increased $59.0 million from December 31, 2014 and $46.3 million during the quarter.

v	Our investment portfolio decreased $59.0 million from December 31, 2014 and $45.1 million during the quarter.

v	Deposits, including repurchase agreements, increased $45.4 million from December 31, 2014 but decreased $29.3 million during the quarter. Additional funding for loan growth was provided through an increase in short-term FHLB borrowings of $50 million during the quarter.

v	Nonperforming loans at $33.4 million decreased $5.6 million from December 31, 2014 and $1.7 million from March 31, 2015. Nonperforming assets at $70.0 million decreased $5.9 million from December 31, 2014 and $4.0 million from March 31, 2015.

v	Net loan charge-offs for the quarter ended June 30, 2015 were $1.7 million, or 0.25% of average loans annualized, compared to $0.7 million, or 0.11%, experienced for the second quarter 2014 and $1.7 million, or 0.26%, for the first quarter 2015.

CTBI invests in limited partnerships that offer low income housing, new markets, and historic tax credits in exchange for investments in low income housing and other community related investments. Our investments in these partnerships increased by $7.2 million during the quarter and $9.3 million year-to-date. Our tax credits for the second quarter 2015, used to offset current income tax expense, totaled $0.9 million compared to $0.3 million in the second quarter 2014 and the first quarter 2015. Year-to-date credits used to offset current income tax expense totaled $1.2 million compared to $0.5 million for the first six months of 2014. The amortization of our investment in these partnerships increased as well. Amortization for the second quarter 2015 totaled $0.7 million compared to $0.2 million for the second quarter 2014 and $0.3 million for the first quarter 2015. Year-to-date amortization was $1.0 million compared to $0.4 million for the first six months of 2014.

Income Statement Review

(dollars in thousands)							Change 2015 vs. 2014
Six Months Ended June 30	2015			2014			Amount			Percent
Net interest income	$	66,087		$	65,583		$	504			0.8	%
Provision for loan losses		4,220			2,080			2,140			102.9
Noninterest income		22,964			21,037			1,927			9.2
Noninterest expense		52,131			52,117			14			0.0
Income taxes		9,360			10,088			(728	)		(7.2	)
Net income	$	23,340		$	22,335		$	1,005			4.5	%

Average earning assets	$	3,497,279		$	3,401,626		$	95,653			2.8	%

Yield on average earnings assets		4.20	%		4.29	%		(0.09	)%		(2.1	)%
Cost of interest bearing funds		0.45	%		0.47	%		(0.02	)%		(4.3	)%

Net interest margin		3.87	%		3.94	%		(0.07	)%		(1.8	)%

Net Interest Income

Net interest income for the quarter increased $0.3 million, or 1.1%, from prior year second quarter and $0.3 million, or 0.8%, from prior quarter, while our net interest margin decreased 7 basis points and 4 basis points during the respective time periods. Average earning assets increased $100.1 million, or 2.9%, from second quarter 2014 and $33.2 million, or 1.0%, from prior quarter, while our yield on average earning assets decreased 8 basis points and 4 basis points, respectively, during these time periods. The cost of interest bearing funds decreased 2 basis points from prior year same quarter but remained flat to prior quarter. Our ratio of average loans to deposits, including repurchase agreements, for the quarter ended June 30, 2015 were 87.1% compared to 83.2% for the quarter ended June 30, 2014 and 86.6% for the quarter ended March 31, 2015. Year-to-date net interest income increased $0.5 million, or 0.8%, from prior year.

Provision for Loan Losses

The provision for loan losses that was added to the allowance for the second quarter 2015 was $2.3 million compared to $0.7 million in the second quarter 2014 and $1.9 million for the quarter ended March 31, 2015. Year-to-date allocations to the reserve were $4.2 million at June 30, 2015 compared to $2.1 million at June 30, 2014. This provision represented a charge against current earnings in order to maintain the allowance at an appropriate level determined using the accounting estimates described in the Critical Accounting Policies and Estimates section. Our provision increased for the quarter due to higher loan growth. Our reserve coverage (allowance for loan and lease loss reserve to nonperforming loans) at June 30, 2015 was 105.4% compared to 75.5% at June 30, 2014 and 98.7% at March 31, 2015. Our loan loss reserve as a percentage of total loans outstanding decreased from the 1.28% at June 30, 2014 but remained at 1.26% from March 31, 2015 to June 30, 2015.

Noninterest Income

Noninterest income for the quarter ended June 30, 2015 increased $1.3 million, or 11.4%, from prior year same quarter and $1.5 million, or 13.9%, from prior quarter. We experienced increases in gains on sales of loans, deposit service charges, trust revenue, and loan related fees year over year and quarter over quarter. Year-to-date noninterest income increased $1.9 million, or 9.2% from prior year. Gains on sales of loans increased $0.6 million, loan related fees increased $0.7 million, trust revenue increased $0.3 million, and deposit service charges increased $0.2 million. The increase in loan related fees resulted primarily from the $0.5 million fluctuation in the fair value adjustments of our mortgage servicing rights.

Noninterest Expense

Noninterest expense for the quarter ended June 30, 2015 increased $1.1 million, or 4.2%, from prior year second quarter and $0.5 million, or 1.9%, from prior quarter. Occupancy and equipment expense and data processing expense for the second quarter 2015 both decreased $0.2 million from same period last year and prior quarter. However, these decreases were offset year over year by a $0.5 million increase in amortization expense related to tax credits and a $0.3 million increase in personnel expense and quarter over quarter by a $0.4 million increase in amortization expense and a $0.3 million increase in net other real estate owned expense. Year-to-date noninterest expense remained relatively flat to prior year as a $0.6 million increase in amortization expense related to tax credits and a $0.6 million increase in personnel expense due to an increase in group medical and life insurance were offset by a $1.0 million decrease in net other real estate owned expense.

Balance Sheet Review

CTBI's total assets at $3.8 billion increased $46.3 million, or an annualized 2.5%, from December 31, 2014 and $10.7 million, or an annualized 1.1%, during the quarter. Loans outstanding at June 30, 2015 were $2.8 billion, increasing $59.0 million, or an annualized 4.4%, from December 31, 2014 and $46.3 million, or an annualized 6.8%, during the quarter. We experienced growth during the quarter of $25.5 million in the commercial loan portfolio, $21.7 million in the indirect loan portfolio, and $1.6 million in the consumer direct loan portfolio, partially offset by a decrease of $2.5 million in the residential loan portfolio. CTBI's investment portfolio decreased $59.0 million, or an annualized 18.5%, from December 31, 2014 and $45.1 million, or an annualized 28.8%, during the quarter. The decline in the investment portfolio was utilized to provide additional liquidity through an increase in our deposits with the Federal Reserve and to support loan growth. Deposits, including repurchase agreements, at $3.2 billion increased $45.4 million, or an annualized 2.9%, from December 31, 2014 but decreased $29.3 million, or an annualized 3.7%, during the quarter. Additional funding for loan growth was provided through an increase in short-term FHLB borrowings of $50 million during the quarter.

Shareholders' equity at June 30, 2015 was $461.6 million compared to $447.9 million at December 31, 2014 and $457.4 million at March 31, 2015. Our tangible common equity/tangible assets ratio increased to 10.68%.

Loans

(in thousands)	June 30, 2015
Loan Category	Balance		Variance from Prior Year-End			Net Charge-Offs			Nonperforming		ALLL
Commercial:
Construction	$	111,218		(8.8	)%	$	(4	)	$	5,391	$	2,622
Secured by real estate		978,412		3.1			880			9,231		13,022
Equipment lease financing		9,859		(4.7	)		0			0		113
Commercial other		363,909		3.4			750			4,200		4,414
Total commercial		1,463,398		2.1			1,626			18,822		20,171

Residential:
Real estate construction		57,914		(7.2	)		87			590		570
Real estate mortgage		707,582		(0.7	)		588			13,002		6,965
Home equity		88,113		(0.3	)		55			608		867
Total residential		853,609		(1.1	)		730			14,200		8,402

Consumer:
Consumer direct		121,620		(0.4	)		455			120		1,541
Consumer indirect		354,204		12.3			666			259		5,076
Total consumer		475,824		8.7			1,121			379		6,617

Total loans	$	2,792,831		2.2	%	$	3,477		$	33,401	$	35,190

Asset Quality

CTBI's total nonperforming loans were $33.4 million at June 30, 2015, a 14.3% decrease from the $39.0 million at December 31, 2014 and a 4.7% decrease from the $35.1 million at March 31, 2015. Nonaccrual loans decreased $0.8 million for the quarter and loans 90+ days past due decreased $0.9 million. Loans 30-89 days past due at $16.0 million was a decrease of $1.8 million from March 31, 2015. Our loan portfolio management processes focus on the immediate identification, management, and resolution of problem loans to maximize recovery and minimize loss. Our loan 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. 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, troubled debt restructuring, impaired status, impairment, nonaccrual status, and adequate loan loss reserves.

Impaired loans, loans not expected to meet contractual principal and interest payments other than insignificant delays, at June 30, 2015 totaled $50.2 million, a $8.9 million decline from the $59.1 million at December 31, 2014 and a $6.3 million decline from the $56.5 million at March 31, 2015. Included in certain loan categories of impaired loans are troubled debt restructurings that were classified as impaired. At June 30, 2015, CTBI had $23.6 million in commercial loans secured by real estate, $6.6 million in commercial real estate construction loans, $4.0 million in commercial other loans, and $1.2 million in real estate mortgage loans that were modified in troubled debt restructurings and impaired. Management evaluates all impaired loans for impairment and records a direct charge-off or provides specific reserves when necessary.

For further information regarding nonperforming and impaired loans, see note 4 to the condensed consolidated financial statements.

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.

Net loan charge-offs for the quarter ended June 30, 2015 were $1.7 million, or 0.25% of average loans annualized, compared to $0.7 million, or 0.11%, experienced for the second quarter 2014 and $1.7 million, or 0.26%, for the first quarter 2015. Of the net charge-offs for the quarter, $1.0 million were in commercial loans, $0.3 million were in indirect auto loans, $0.2 million were in residential real estate mortgage loans, and $0.2 million were in consumer direct loans. Net loan charge-offs for the six months ended June 30, 2015 were $3.5 million, or 0.25% of average loans, compared to $2.5 million, or 0.19% of average loans, experienced for the six months ended June 30, 2014.

Our level of foreclosed properties at $36.4 million at June 30, 2015 was a decrease from $36.8 million at December 31, 2014 and $38.7 million at March 31, 2015. Sales of foreclosed properties for the quarter ended June 30, 2015 totaled $2.4 million while new foreclosed properties totaled $0.4 million. At June 30, 2015, the book value of properties under contracts to sell was $2.3 million; however, the closings had not occurred at quarter-end. Also included in other real estate owned at June 30, 2015 is a $0.3 million property which was not acquired through foreclosure.

When foreclosed properties are acquired, appraisals are obtained and the properties are booked at the current market value less expected sales costs. Additionally, periodic updated appraisals are obtained on unsold foreclosed properties. When an updated appraisal reflects a market value below the current book value, a charge is booked to current earnings to reduce the property to its new market value less expected sales costs. Charges to earnings in the second quarter 2015 to reflect the decrease in current market values of foreclosed properties totaled $0.3 million. There were fifty properties appraised during the second quarter 2015. Of these, sixteen properties were written down by a total of $0.3 million. Charges during the quarters ended June 30, 2014 and March 31, 2015 were $0.3 million and $0.1 million, respectively. 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. Approximately forty-four percent of our OREO properties have been reappraised within the past 12 months. Management anticipates that our foreclosed properties will remain elevated as we work through current market conditions.

The major classifications of foreclosed properties are shown in the following table:

(in thousands)	June 30, 2015		December 31, 2014
1-4 family	$	8,188	$	10,337
Agricultural/farmland		116		116
Construction/land development/other		18,599		18,735
Multifamily		1,127		1,289
Non-farm/non-residential		8,375		6,299
Total foreclosed properties	$	36,405	$	36,776

The appraisal aging analysis of foreclosed properties, as well as the holding period, at June 30, 2015 is shown below:

(in thousands)
Appraisal Aging Analysis			Holding Period Analysis
Days Since Last Appraisal	Current Book Value		Holding Period	Current Book Value
Up to 3 months	$	3,521	Less than one year	$	10,581
3 to 6 months		3,553	1 to 2 years		2,886
6 to 9 months		4,882	2 to 3 years		1,204
9 to 12 months		3,890	3 to 4 years		11,055
12 to 24 months		19,247	4 to 5 years		3,160
Over 24 months		1,312	Over 5 years*		7,519
Total	$	36,405	Total	$	36,405

*Regulatory approval is required and has been obtained to hold these properties beyond the initial period of 5 years. Additional approval may be required to continue to hold these properties should they not be liquidated during the extension period.

Dividends

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

Pay Date	Record Date	Amount Per Share
July 1, 2015	June 15, 2015	$	0.300
April 1, 2015	March 15, 2015		0.300
January 1, 2015	December 15, 2014		0.300
October 1, 2014	September 15, 2014		0.300
July 1, 2014	June 15, 2014		0.290
April 1, 2014	March 15, 2014		0.291

On July 28, 2015, the Board of Directors of CTBI declared a quarterly cash dividend of $0.31 per share to be paid on October 1, 2015 to shareholders of record on September 15, 2015. This represents an increase of 3.3% in the quarterly cash dividend.

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, 2015, we had approximately $145.0 million in cash and cash equivalents and approximately $581.2 million in securities valued at estimated fair value designated as available-for-sale and available to meet liquidity needs on a continuing basis compared to $105.5 million and $640.2 million at December 31, 2014. 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 $51.1 million at June 30, 2015 compared to $61.2 million at December 31, 2014. As of June 30, 2015, we had a $332 million available borrowing position with the Federal Home Loan Bank compared to $312.3 million at December 31, 2014. 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, 2015 and December 31, 2014, we had $44 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, 2015 were federal funds sold of $8.1 million compared to $4.9 million at December 31, 2014, and deposits with the Federal Reserve were $75.1 million compared to $40.9 million at December 31, 2014. Additionally, we project cash flows from our investment portfolio to generate additional liquidity over the next 90 days.

The investment portfolio consists of investment grade short-term issues suitable for bank investments. The majority of the investment portfolio is in U.S. government and government sponsored agency issuances. At June 30, 2015, available-for-sale ("AFS") securities comprised approximately 99.7% of the total investment portfolio, and the AFS portfolio was approximately 126% of equity capital. Ninety-two 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

Shareholders' equity was $461.6 million at June 30, 2015 and $447.9 million at December 31, 2014. CTBI's annualized dividend yield to shareholders as of June 30, 2015 was 3.44%. Our primary source of capital growth is the retention of earnings. Cash dividends were $0.600 per share and $0.581 per share for the six months ended June 30, 2015 and 2014, respectively. We retained 55.2% of our earnings for the first six months of 2015 compared to 55.0% for the first six months of 2014.

On July 2, 2013, the Federal Reserve approved final rules that substantially amend the regulatory risk-based capital rules applicable to CTBI and CTB. The FDIC subsequently approved these rules. The final rules implement the "Basel III" regulatory capital reforms and changes required by the Dodd-Frank Act.

The rules include new risk-based capital and leverage ratios, which are being phased in from 2015 to 2019, and refine the definition of what constitutes "capital" for purposes of calculating those ratios. The new minimum capital level requirements applicable to CTBI and CTB under the final rules would be: (i) a new common equity Tier 1 capital ratio of 4.5%; (ii) a Tier 1 capital ratio of 6% (increased from 4%); (iii) a total capital ratio of 8% (unchanged from current rules); and (iv) a Tier 1 leverage ratio of 4% for all institutions. The final rules also establish a "capital conservation buffer" above the new regulatory minimum capital requirements, which must consist entirely of common equity Tier 1 capital. The capital conservation buffer will be phased-in over four years beginning on January 1, 2016.

The final rules also implement revisions and clarifications consistent with Basel III regarding the various components of Tier 1 capital, including common equity, unrealized gains and losses, as well as certain instruments that will no longer qualify as Tier 1 capital, some of which will be phased out over time. However, the final rules provide that small depository institution holding companies with less than $15 billion in total assets as of December 31, 2009 (which includes CTBI) will be able to permanently include non-qualifying instruments that were issued and included in Tier 1 or Tier 2 capital prior to May 19, 2010 in additional Tier 1 or Tier 2 capital until they redeem such instruments or until the instruments mature.

The final rules also contain revisions to the prompt corrective action framework, which is designed to place restrictions on insured depository institutions, including the Bank, if their capital levels begin to show signs of weakness. These revisions took effect January 1, 2015. Under the prompt corrective action requirements, which are designed to complement the capital conservation buffer, insured depository institutions are required to meet the following increased capital level requirements in order to qualify as "well capitalized:" (i) a new common equity Tier 1 capital ratio of 6.5%; (ii) a Tier 1 capital ratio of 8% (increased from 6%); (iii) a total capital ratio of 10% (unchanged from current rules); and (iv) a Tier 1 leverage ratio of 5% (unchanged from current rules).

The final rules set forth certain changes for the calculation of risk-weighted assets, which we were required to utilize beginning January 1, 2015. The standardized approach final rule utilizes an increased number of credit risk exposure categories and risk weights, and also addresses: (i) an alternative standard of creditworthiness consistent with Section 939A of the Dodd-Frank Act; (ii) revisions to recognition of credit risk mitigation; (iii) rules for risk weighting of equity exposures and past due loans; (iv) revised capital treatment for derivatives and repo-style transactions; and (v) disclosure requirements for top-tier banking organizations with $50 billion or more in total assets that are not subject to the "advance approach rules" that apply to banks with greater than $250 billion in consolidated assets. For more information regarding Basel III, please refer to the Supervision and Regulation section of Item 1. Business in our annual report on Form 10-K for the year ended December 31, 2014.

As of June 30, 2015, following implementation of the new rules, CTBI had a Common Equity Tier 1 capital ratio of 14.35%, a Tier 1 capital ratio of 16.51%, a total capital ratio of 17.76%, and a Tier 1 leverage ratio of 12.24%, all above the required levels to be considered "well-capitalized."

As of June 30, 2015, we are not aware of any other 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, except as provided for in Basel III and the Dodd-Frank Act, which is discussed in the Supervision and Regulation section of Item 1. Business in our annual report on Form 10-K for the year ended December 31, 2014.

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.

Since 2008 the U.S. economy has faced a severe economic crisis including a major recession from which it is slowly recovering. Commerce and business growth across a wide range of industries and regions in the U.S. remains reduced and local governments and many businesses continue to experience financial difficulty. While reflecting some improvement in many parts of the country and in parts of our own service area, unemployment levels remain elevated. There can be no assurance that these conditions will continue to improve and these conditions could worsen. Regionally, recent economic conditions in the coal industry could result in increased unemployment in the markets we serve where coal is a major contributor to the economy. In addition, ongoing federal budget negotiations, the implementation of the Patient Protection and Affordable Care Act, the Federal Open Market Committee's plan for economic easing, and the level of U.S. debt may have a destabilizing effect on financial markets.

Our financial performance generally, and in particular the ability of borrowers to pay interest on and repay principal of outstanding loans and the value of collateral securing those loans, as well as demand for loans and other products and services we offer, is highly dependent upon the business environment in the markets where we operate, in the states of Kentucky, West Virginia, and Tennessee and in the United States as a whole. A favorable business environment is generally characterized by, among other factors, economic growth, efficient capital markets, low inflation, low unemployment, high business and investor confidence, and strong business earnings. Unfavorable or uncertain economic and market conditions can be caused by declines in economic growth, business activity, or investor or business confidence; limitations on the availability or increases in the cost of credit and capital; increases in inflation or interest rates; high unemployment; natural disasters; or a combination of these or other factors.

Overall, during recent years, the business environment has been adverse for many households and businesses in the United States and worldwide. While economic conditions in the United States and worldwide have improved since the recession, there can be no assurance that this improvement will continue. Economic pressure on consumers and uncertainty regarding continuing economic improvement may result in changes in consumer and business spending, borrowing, and savings habits. Such conditions could adversely affect the credit quality of our loans and our business, financial condition, and results of operations.

Stock Repurchase Program

CTBI has not acquired any shares of common stock through the stock repurchase program since February 2008. There are 67,371 shares remaining under CTBI's current repurchase authorization.

Critical Accounting Policies and Estimates

We have identified the following critical accounting policies:

b. Available-for-sale securities. Investments not classified as trading securities (nor as held-to-maturity securities) shall be classified as available-for-sale securities.

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 2.02 percent over one year and increase by 3.85 percent over two years. A 25 basis point decrease in the yield curve would decrease net interest income by an estimated 0.15 percent over one year and decrease by 0.23 percent 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, 2014.

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) under the Securities Exchange Act of 1934. As of the end of the period covered by this report, an evaluation was carried out by CTBI's management, with the participation of our Chief Executive Officer and the Executive Vice President, Chief Financial Officer, and Treasurer, 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, 2015 were effective in ensuring material information required to be disclosed in this quarterly report on Form 10-Q was recorded, processed, summarized, and reported on a timely basis.

CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING

There were no changes in CTBI's internal control over financial reporting that occurred during the quarter ended June 30, 2015 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:
	CTBI's Principal Executive Officer and Principal Financial Officer have furnished to the SEC the certifications with respect to this Form 10-Q that are required by Sections 302 and 906 of the Sarbanes-Oxley Act of 2002

Item 6.	a. Exhibits:
	(1) Certifications Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002	Exhibit 31.1 Exhibit 31.2
	(2) Certifications Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002	Exhibit 32.1 Exhibit 32.2
	(3) XBRL Instance Document	Exhibit 101.INS
	(4) XBRL Taxonomy Extension Schema	Exhibit 101.SCH
	(5) XBRL Taxonomy Extension Calculation Linkbase	Exhibit 101.CAL
	(6) XBRL Taxonomy Extension Definition Linkbase	Exhibit 101.DEF
	(7) XBRL Taxonomy Extension Label Linkbase	Exhibit 101.LAB
	(8) XBRL Taxonomy Extension Presentation Linkbase	Exhibit 101.PRE

SIGNATURES

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

	COMMUNITY TRUST BANCORP, INC.

Date: August 7, 2015	By:	/s/ Jean R. Hale
		Jean R. Hale
		Chairman, President, and Chief Executive Officer

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

[X]	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the quarterly period ended June 30, 2015

	Or

[ ]	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the transition period from _____________ to _____________

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

346 North Mayo Trail Pikeville, Kentucky (Address of principal executive offices)	41501 (Zip code)

Large accelerated filer	Accelerated filer ✓	Non-accelerated filer	Smaller reporting company
		(Do not check if a smaller reporting company)

(dollars in thousands)	(unaudited) June 30 2015			December 31 2014
Assets:
Cash and due from banks	$	58,118		$	56,299
Interest bearing deposits		78,777			44,285
Federal funds sold		8,136			4,933
Cash and cash equivalents		145,031			105,517

Certificates of deposit in other banks		6,665			8,197
Securities available-for-sale at fair value (amortized cost of $579,513 and $638,395, respectively)		581,236			640,186
Securities held-to-maturity at amortized cost (fair value of $1,641 and $1,644, respectively)		1,661			1,662
Loans held for sale		1,993			2,264

Loans		2,792,831			2,733,824
Allowance for loan and lease losses		(35,190	)		(34,447	)
Net loans		2,757,641			2,699,377

Premises and equipment, net		48,833			49,980
Federal Home Loan Bank stock		17,927			17,927
Federal Reserve Bank stock		4,887			4,869
Goodwill		65,490			65,490
Core deposit intangible (net of accumulated amortization of $8,245 and $8,138, respectively)		371			477
Bank owned life insurance		61,490			60,697
Mortgage servicing rights		3,235			2,968
Other real estate owned		36,698			36,776
Other assets		36,899			27,378
Total assets	$	3,770,057		$	3,723,765

Liabilities and shareholders' equity:
Deposits:
Noninterest bearing	$	701,958		$	677,626
Interest bearing		2,211,113			2,196,631
Total deposits		2,913,071			2,874,257

Repurchase agreements		241,776			235,186
Federal funds purchased and other short-term borrowings		12,220			11,041
Advances from Federal Home Loan Bank		51,112			61,170
Long-term debt		61,341			61,341
Other liabilities		28,914			32,893
Total liabilities		3,308,434			3,275,888

Shareholders' equity:
Preferred stock, 300,000 shares authorized and unissued		-			-
Common stock, $5 par value, shares authorized 25,000,000; shares outstanding 2015 – 17,489,061; 2014 – 17,466,375		87,446			87,332
Capital surplus		215,470			214,684
Retained earnings		157,587			144,697
Accumulated other comprehensive income, net of tax		1,120			1,164
Total shareholders' equity		461,623			447,877

Total liabilities and shareholders' equity	$	3,770,057		$	3,723,765