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Securities
 3 Months Ended
Mar. 31, 2021
Securities [Abstract]  
Securities
Note 3 – Securities


Debt 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.  As of March 31, 2021 and December 31, 2020, CTBI had no held-to-maturity securities.


The amortized cost and fair value of debt securities at March 31, 2021 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
  
$
205,355
    
$
419
    
$
(2,155
)
  
$
203,619
  
State and political subdivisions
    
219,389
      
5,416
      
(4,688
)
    
220,117
  
U.S. government sponsored agency mortgage-backed securities
    
669,134
      
8,616
      
(2,918
)
    
674,832
  
Other debt securities
    
56,346
      
301
      
(20
)
    
56,627
  
Total available-for-sale securities
  
$
1,150,224
    
$
14,752
    
$
(9,781
)
  
$
1,155,195
  

The amortized cost and fair value of debt securities at December 31, 2020 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
  
$
148,507
    
$
483
    
$
(197
)
  
$
148,793
  
State and political subdivisions
    
133,287
      
7,132
      
(3
)
    
140,416
  
U.S. government sponsored agency mortgage-backed securities
    
640,537
      
11,648
      
(378
)
    
651,807
  
Other debt securities
    
56,443
      
10
      
(208
)
    
56,245
  
Total available-for-sale securities
  
$
978,774
    
$
19,273
    
$
(786
)
  
$
997,261
  



The amortized cost and fair value of debt securities at March 31, 2021 by contractual maturity are shown below.  Expected maturities will differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties.

  
Available-for-Sale
  
(in thousands)
  
Amortized
Cost
    
Fair Value
  
Due in one year or less
  
$
1,330
    
$
1,334
  
Due after one through five years
    
92,173
      
92,176
  
Due after five through ten years
    
167,212
      
166,553
  
Due after ten years
    
164,029
      
163,673
  
U.S. government sponsored agency mortgage-backed securities
    
669,134
      
674,832
  
Other debt securities
    
56,346
      
56,627
  
Total debt securities
  
$
1,150,224
    
$
1,155,195
  


During the three months ended March 31, 2021, we had a net securities loss of $168 thousand, consisting of a pre-tax gain of $60 thousand realized on sales and calls of AFS securities and an unrealized loss of $228 thousand from the fair market value adjustment of equity securities. During the three months ended March 31, 2020, we had a net securities gain of $249 thousand, consisting of a pre-tax gain of $481 thousand realized on calls of AFS securities and an unrealized loss of $232 thousand from the fair market value adjustment of equity securities.

Equity Securities at Fair Value


CTBI made the election permitted by ASC 321-10-35-2 to record its Visa Class B shares at fair value.  Equity securities at fair value as of March 31, 2021 were $2.2 million, as a result of a $0.2 million decrease in the fair market value in the first quarter 2021.  The fair market value of equity securities decreased $0.2 million in the first quarter 2020.  No equity securities were sold during the three months ended March 31, 2021 and 2020.


The amortized cost of securities pledged as collateral, to secure public deposits and for other purposes, was $413.5 million at March 31, 2021 and $354.5 million at December 31, 2020.


The amortized cost of securities sold under agreements to repurchase amounted to $389.9 million at March 31,2021 and $386.6 million at December 31, 2020.


CTBI evaluates its investment portfolio on a quarterly basis for impairment.  The analysis performed as of March 31, 2021 indicates that all impairment is considered temporary, market and interest rate driven, and not credit-related.  The percentage of total debt securities with unrealized losses as of March 31,2021 was 53.2% compared to 16.2% as of December 31, 2020.  The following table provides 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 March 31, 2021 that are not deemed to have credit losses.  As stated above, CTBI had no HTM securities as of March 31, 2021.

Available-for-Sale

(in thousands)
  
Amortized
Cost
    
Gross
Unrealized
Losses
    
Fair Value
  
Less Than 12 Months
                  
U.S. Treasury and government agencies
  
$
136,625
    
$
(2,028
)
  
$
134,597
  
State and political subdivisions
    
101,944
      
(4,660
)
    
97,284
  
U.S. government sponsored agency mortgage-backed securities
    
347,136
      
(2,905
)
    
344,231
  
Other debt securities
    
0
      
0
      
0
  
Total <12 months temporarily impaired AFS securities
    
585,705
      
(9,593
)
    
576,112
  
                         
12 Months or More
                        
U.S. Treasury and government agencies
    
28,763
      
(127
)
    
28,636
  
State and political subdivisions
    
533
      
(28
)
    
505
  
U.S. government sponsored agency mortgage-backed securities
    
2,614
      
(13
)
    
2,601
  
Other debt securities
    
6,538
      
(20
)
    
6,518
  
Total ≥12 months temporarily impaired AFS securities
    
38,448
      
(188
)
    
38,260
  
                         
Total
                        
U.S. Treasury and government agencies
    
165,388
      
(2,155
)
    
163,233
  
State and political subdivisions
    
102,477
      
(4,688
)
    
97,789
  
U.S. government sponsored agency mortgage-backed securities
    
349,750
      
(2,918
)
    
346,832
  
Other debt securities
    
6,538
      
(20
)
    
6,518
  
Total temporarily impaired AFS securities
  
$
624,153
    
$
(9,781
)
  
$
614,372
  


The analysis performed as of December 31, 2020 indicated that all impairment was considered temporary, market and interest rate driven, and not credit-related.  The following table provides the amortized cost, gross unrealized losses, and fair 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, 2020 that are not deemed to be other-than-temporarily impaired.  As stated above, CTBI had no HTM securities as of December 31, 2020.

Available-for-Sale

(in thousands)
  
Amortized
Cost
    
Gross
Unrealized
Losses
    
Fair Value
  
Less Than 12 Months
                  
U.S. Treasury and government agencies
  
$
5,604
    
$
(7
)
  
$
5,597
  
State and political subdivisions
    
534
      
(3
)
    
531
  
U.S. government sponsored agency mortgage-backed securities
    
58,463
      
(336
)
    
58,127
  
Other debt securities
    
22,660
      
(29
)
    
22,631
  
Total <12 months temporarily impaired AFS securities
    
87,261
      
(375
)
    
86,886
  
                         
12 Months or More
                        
U.S. Treasury and government agencies
    
46,163
      
(190
)
    
45,973
  
State and political subdivisions
    
0
      
0
      
0
  
U.S. government sponsored agency mortgage-backed securities
    
2,801
      
(42
)
    
2,759
  
Other debt securities
    
26,283
      
(179
)
    
26,104
  
Total ≥12 months temporarily impaired AFS securities
    
75,247
      
(411
)
    
74,836
  
                         
Total
                        
U.S. Treasury and government agencies
    
51,767
      
(197
)
    
51,570
  
State and political subdivisions
    
534
      
(3
)
    
531
  
U.S. government sponsored agency mortgage-backed securities
    
61,264
      
(378
)
    
60,886
  
Other debt securities
    
48,943
      
(208
)
    
48,735
  
Total temporarily impaired AFS securities
  
$
162,508
    
$
(786
)
  
$
161,722
  

U.S. Treasury and Government Agencies


The unrealized losses in U.S. Treasury and government agencies were caused by interest rate changes.  The contractual terms of those investments do not permit the issuer to settle the securities at a price less than par which will equal amortized cost at maturity.  CTBI does not intend to sell the investments and it is not more likely than not that we will be required to sell the investments before recovery of their amortized cost.

State and Political Subdivisions


The unrealized losses in securities of state and political subdivisions were caused by interest rate changes.  The contractual terms of those investments do not permit the issuer to settle the securities at a price less than par which will equal amortized cost at maturity.  CTBI does not intend to sell the investments before recovery of their amortized cost and it is not more likely than not that we will be required to sell the investments before recovery of their amortized cost.

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 changes.  CTBI expects to recover the amortized cost basis over the term of the securities.  CTBI does not intend to sell the investments, and it is not more likely than not we will be required to sell the investments before recovery of their amortized cost.

Other Debt Securities


The unrealized losses in other debt securities were caused by interest rate changes.  The contractual terms of those investments do not permit the issuer to settle the securities at a price less than par which will equal amortized cost at maturity.  CTBI does not intend to sell the investments and it is not more likely than not that we will be required to sell the investments before recovery of their amortized cost.