Fair Market Value of Financial Assets and Liabilities (Tables)

3 Months Ended

Mar. 31, 2021

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, 2021 and December 31, 2020 and indicate the level within the fair value hierarchy of the valuation techniques.

			Fair Value Measurements at March 31, 2021 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	$	203,619	$	134,598	$	69,021	$	0
State and political subdivisions		220,117		0		220,117		0
U.S. government sponsored agency mortgage-backed securities		674,832		0		674,832		0
Other debt securities		56,627		0		56,627		0
Equity securities at fair value		2,243		0		0		2,243
Mortgage servicing rights		5,584		0		0		5,584

			Fair Value Measurements at December 31, 2020 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	$	148,793	$	74,991	$	73,802	$	0
State and political subdivisions		140,416		0		140,416		0
U.S. government sponsored agency mortgage-backed securities		651,807		0		651,807		0
Other debt securities		56,245		0		56,245		0
Equity securities at fair value		2,471		0		0		2,471
Mortgage servicing rights		4,068		0		0		4,068

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, for the periods indicated, using significant unobservable (Level 3) inputs:

(in thousands)	Three Months Ended March 31, 2021						Three Months Ended March 31, 2020
	Equity Securities at Fair Value			Mortgage Servicing Rights			Equity Securities at Fair Value			Mortgage Servicing Rights
Beginning balance	$	2,471		$	4,068		$	1,953		$	3,263
Total unrealized gains (losses) Included in net income		(228	)		1,030			(232	)		(818	)
Issues		0			736			0			144
Settlements		0			(250	)		0			(108	)
Ending balance	$	2,243		$	5,584		$	1,721		$	2,481
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	)	$	1,030		$	(232	)	$	(818	)

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)	2021		2020
Total gains (losses)	$	552	$	(1,159	)

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, 2021 and December 31, 2020 and indicate the level within the fair value hierarchy of the valuation techniques.

			Fair Value Measurements at March 31, 2021 Using
(in thousands)	Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets measured – nonrecurring basis
Collateral dependent loans	$	563	$	0	$	0	$	563
Other real estate owned		530		0		0		530

			Fair Value Measurements at December 31, 2020 Using
(in thousands)	Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets measured – nonrecurring basis
Collateral-dependent loans	$	1,768	$	0	$	0	$	1,768
Other real estate owned		2,395		0		0		2,395

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, 2021 and December 31, 2020.

(in thousands)	Quantitative Information about Level 3 Fair Value Measurements
	Fair Value at March 31, 2021	Valuation Technique(s)	Unobservable Input	Range (Weighted Average)
Equity securities at fair value	$2,243	Discount cash flows, computer pricing model	Discount rate	8.0% - 12.0% (10.0%)
			Conversion date	Dec 2023 – Dec 2027 (Dec 2025)
Mortgage servicing rights	$5,584	Discount cash flows, computer pricing model	Constant prepayment rate	0.0% - 36.5% (11.0%)
			Probability of default	0.0% - 100.0% (1.8%)
			Discount rate	10.0% - 11.5% (10.1%)
Collateral dependent loans	$563	Market comparable properties	Marketability discount	0.0%- 55.3% (55.3%)
Other real estate owned	$530	Market comparable properties	Comparability adjustments	9.1% - 58.1% (24.9%)

(in thousands)	Quantitative Information about Level 3 Fair Value Measurements
	Fair Value at December 31, 2020	Valuation Technique(s)	Unobservable Input	Range (Weighted Average)
Equity securities at fair value	$2,471	Discount cash flows, computer pricing model	Discount rate	8.0% - 12.0% (10.0%)
			Conversion date	Dec 2022 – Dec 2026 (Dec 2024)
Mortgage servicing rights	$4,068	Discount cash flows, computer pricing model	Constant prepayment rate	0.0% - 32.8% (15.7%)
			Probability of default	0.0% - 100.0% (1.7%)
			Discount rate	10.0% - 11.5% (10.1%)
Collateral-dependent loans	$1,768	Market comparable properties	Marketability discount	17.5% - 31.5% (24.5%)
Other real estate owned	$2,395	Market comparable properties	Comparability adjustments	(9.1)% - 64.3% (12.8%)

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, 2021 and indicates the level within the fair value hierarchy of the valuation techniques.  In accordance with the adoption of ASU 2016-01, the fair values as of March 31, 2021 were measured using an exit price notion.

			Fair Value Measurements at March 31, 2021 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	$	423,105	$	423,105	$	0	$	0
Certificates of deposit in other banks		245		0		245		0
Debt securities available-for-sale		1,155,195		134,598		1,020,597		0
Equity securities at fair value		2,243		0		0		2,243
Loans held for sale		17,748		18,195		0		0
Loans, net		3,493,458		0		0		3,649,893
Federal Home Loan Bank stock		9,971		0		9,971		0
Federal Reserve Bank stock		4,887		0		4,887		0
Accrued interest receivable		15,188		0		15,188		0
Mortgage servicing rights		5,584		0		0		5,584
Financial liabilities:
Deposits	$	4,233,772	$	1,283,309	$	3,002,615	$	0
Repurchase agreements		354,235		0		0		354,158
Federal funds purchased		500		0		500		0
Advances from Federal Home Loan Bank		390		0		427		0
Long-term debt		57,841		0		0		38,425
Accrued interest payable		1,365		0		1,365		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, 2020 and indicates the level within the fair value hierarchy of the valuation techniques.

			Fair Value Measurements at December 31, 2020 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	$	338,235	$	338,235	$	0	$	0
Certificates of deposit in other banks		245		0		245		0
Debt securities available-for-sale		997,261		74,991		922,270		0
Equity securities at fair value		2,471		0		0		2,471
Loans held for sale		23,259		23,884		0		0
Loans, net		3,506,189		0		0		3,658,554
Federal Home Loan Bank stock		10,048		0		10,048		0
Federal Reserve Bank stock		4,887		0		4,887		0
Accrued interest receivable		15,818		0		15,818		0
Mortgage servicing rights		4,068		0		0		4,068
Financial liabilities:
Deposits	$	4,016,082	$	1,140,925	$	2,913,217	$	0
Repurchase agreements		355,862		0		0		355,918
Federal funds purchased		500		0		500		0
Advances from Federal Home Loan Bank		395		0		436		0
Long-term debt		57,841		0		0		40,081
Accrued interest payable		1,243		0		1,243		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