Fair Market Value of Financial Assets and Liabilities (Tables)

3 Months Ended

Mar. 31, 2018

Fair Market Value of Financial Assets and Liabilities [Abstract]

Fair Value Assets Measured on Recurring Basis

The following tables present the fair value measurements of assets recognized in the accompanying balance sheets measured at fair value on a recurring basis as of March 31, 2018 and December 31, 2017 and indicate the level within the fair value hierarchy of the valuation techniques.

			Fair Value Measurements at March 31, 2018 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	$	250,045	$	86,316	$	163,729	$	0
State and political subdivisions		132,995		0		132,995		0
U.S. government sponsored agency mortgage-backed securities		221,343		0		221,343		0
Other debt securities		507		0		507		0
CRA investment funds		0		0		0		0
Mortgage servicing rights		3,706		0		0		3,706

(in thousands)			Fair Value Measurements at December 31, 2017 Using
	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	$	210,572	$	64,598	$	145,974	$	0
State and political subdivisions		145,015		0		145,015		0
U.S. government sponsored agency mortgage-backed securities		205,309		0		205,309		0
Other debt securities		507		0		507		0
CRA investment funds		24,358		24,358		0		0
Mortgage servicing rights		3,484		0		0		3,484

Reconciliation of the Beginning and Ending Balance of Recurring Fair Value Measurements Using Significant Unobservable (Level 3) Inputs

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:

Mortgage Servicing Rights
	Three Months Ended
	March 31
(in thousands)	2018			2017
Beginning balance	$	3,484		$	3,433
Total recognized gains
Included in net income		228			85
Issues		100			83
Settlements		(106	)		(127	)
Ending balance	$	3,706		$	3,474
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	$	228		$	85

Realized and Unrealized Gains and Losses for Items Included in Net Income in the Consolidated Statements of Income

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

Noninterest Income	Three Months Ended
	March 31
(in thousands)	2018		2017
Total gains (losses)	$	122	$	(42	)

Fair Value Measurements of Recognized Assets Measured on Nonrecurring Basis

The following tables present the fair value measurements of assets recognized in the accompanying balance sheets measured at fair value on a nonrecurring basis as of March 31, 2018 and December 31, 2017 and indicate the level within the fair value hierarchy of the valuation techniques.

			Fair Value Measurements at March 31, 2018 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)	$	654	$	0	$	0	$	654
Other real estate owned		2,243		0		0		2,243

			Fair Value Measurements at December 31, 2017 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)	$	2,709	$	0	$	0	$	2,709
Other real estate owned		18,951		0		0		18,951

Quantitative Information About Unobservable Inputs Used in Recurring and Nonrecurring Level 3 Fair Value Measurements

The following tables present quantitative information about unobservable inputs used in recurring and nonrecurring Level 3 fair value measurements at March 31, 2018 and December 31, 2017.

(in thousands)	Quantitative Information about Level 3 Fair Value Measurements
	Fair Value at March 31, 2018		Valuation Technique(s)	Unobservable Input	Range (Weighted Average)
Mortgage servicing rights	$	3,706	Discount cash flows, computer pricing model	Constant prepayment rate		7.0% - 33.0% (8.9%)
				Probability of default		0.0% - 100.0% (3.3%)
				Discount rate		10.0% - 11.5% (10.1%)
Impaired loans (collateral-dependent)	$	654	Market comparable properties	Marketability discount		10.0% - 91.3% (37.1%)
Other real estate owned	$	2,243	Market comparable properties	Comparability adjustments		1.0% - 39.6% (14.5%)

(in thousands)	Quantitative Information about Level 3 Fair Value Measurements
	Fair Value at December 31, 2017		Valuation Technique(s)	Unobservable Input	Range (Weighted Average)
Mortgage servicing rights	$	3,484	Discount cash flows, computer pricing model	Constant prepayment rate		7.0% - 45.0% (10.0%)
				Probability of default		0.0% - 100.0% (3.0%)
				Discount rate		10.0% - 11.5% (10.1%)
Impaired loans (collateral-dependent)	$	2,709	Market comparable properties	Marketability discount		1.9% - 89.8% (38.5%)
Other real estate owned	$	18,951	Market comparable properties	Comparability adjustments		6.0% - 58.6% (15.%)

Fair Value of Financial Instruments and Levels within the Fair Value Hierarchy of the Valuation Techniques

The following table presents estimated fair value of CTBI’s financial instruments as of March 31, 2018 and indicates the level within the fair value hierarchy of the valuation techniques.  In accordance with the prospective adoption of ASU 2016-01, the fair values as of March 31, 2018 were measured using an exit price notion.

			Fair Value Measurements at March 31, 2018 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	$	194,468	$	194,468	$	0	$	0
Certificates of deposit in other banks		8,085		0		8,056		0
Securities available-for-sale		604,890		86,316		518,574		0
Securities held-to-maturity		659		0		660		0
Loans held for sale		1,145		1,177		0		0
Loans, net		3,083,052		0		0		3,154,449
Federal Home Loan Bank stock		17,927		0		17,927		0
Federal Reserve Bank stock		4,887		0		4,887		0
Accrued interest receivable		13,311		0		13,311		0
Mortgage servicing rights		3,706		0		0		3,706
Financial liabilities:
Deposits	$	3,319,670	$	825,345	$	2,535,681	$	0
Repurchase agreements		244,822		0		0		244,943
Federal funds purchased		7,078		0		7,078		0
Advances from Federal Home Loan Bank		822		0		895		0
Long-term debt		59,341		0		0		44,166
Accrued interest payable		2,927		0		2,927		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, 2017 and indicates the level within the fair value hierarchy of the valuation techniques.

(in thousands)			Fair Value Measurements at December 31, 2017 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	$	175,274	$	175,274	$	0	$	0
Certificates of deposit in other banks		9,800		0		9,772		0
Securities available-for-sale		585,761		88,956		496,805		0
Securities held-to-maturity		659		0		660		0
Loans held for sale		1,033		1,060		0		0
Loans, net		3,086,789		0		0		3,092,437
Federal Home Loan Bank stock		17,927		0		17,927		0
Federal Reserve Bank stock		4,887		0		4,887		0
Accrued interest receivable		13,338		0		13,338		0
Mortgage servicing rights		3,484		0		0		3,484
Financial liabilities:
Deposits	$	3,263,863	$	790,930	$	2,319,278	$	0
Repurchase agreements		243,814		0		0		243,932
Federal funds purchased		7,312		0		7,312		0
Advances from Federal Home Loan Bank		845		0		841		0
Long-term debt		59,341		0		0		44,166
Accrued interest payable		2,228		0		2,228		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