10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C.  20549

FORM 10-Q

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the quarterly period ended June 30, 2023
	Or
☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the transition period from _____________ to _____________

Commission file number 001-31220

COMMUNITY TRUST BANCORP, INC.

(Exact name of registrant as specified in its charter)

Kentucky	61-0979818
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification No.)
346 North Mayo Trail P.O. Box 2947 Pikeville, Kentucky	41502
(Address of principal executive offices)	(Zip code)

(606) 432-1414

(Registrant’s telephone number)

Securities registered pursuant to Section 12(b) of the Act:

Common Stock

(Title of class)

CTBI	NASDAQ Global Select Market
(Trading symbol)	(Name of exchange on which registered)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.

Yes  ☑ No

Indicate by check mark whether the registrant has submitted electronically every interactive data file required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes  ☑ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company.  See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer ☐	Accelerated Filer  ☑	Non-accelerated Filer  ☐
Smaller Reporting Company ☐	Emerging Growth Company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.        ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes  ☐    No ☑

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practical date.

Common stock – 17,991,419 shares outstanding at July 31, 2023

CAUTIONARY STATEMENT

REGARDING FORWARD LOOKING STATEMENTS

Certain of the statements contained herein that are not historical facts are forward-looking statements within the meaning of the Private Securities Litigation Reform Act. Community Trust Bancorp, Inc.’s (“CTBI”) actual results may differ materially from those included in the forward-looking statements. Forward-looking statements are typically identified by words or phrases such as “believe,” “expect,” “anticipate,” “intend,” “estimate,” “may increase,” “may fluctuate,” and similar expressions or future or conditional verbs such as “will,” “should,” “would,” and “could.” These forward-looking statements involve risks and uncertainties including, but not limited to, economic conditions, portfolio growth, the credit performance of the portfolios, including bankruptcies, and seasonal factors; changes in general economic conditions including the performance of financial markets, prevailing inflation and interest rates, realized gains from sales of investments, gains from asset sales, and losses on commercial lending activities; the effects of epidemics, pandemics, or other infectious disease outbreaks; results of various investment activities; the effects of competitors’ pricing policies, changes in laws and regulations, competition, and demographic changes on target market populations’ savings and financial planning needs; industry changes in information technology systems on which we are highly dependent; failure of acquisitions to produce revenue enhancements or cost savings at levels or within the time frames originally anticipated or unforeseen integration difficulties; and the resolution of legal  proceedings and related matters. In addition, the banking industry in general is subject to various monetary, operational, and fiscal policies and regulations, which include, but are not limited to, those determined by the Federal Reserve Board, the Federal Deposit Insurance Corporation, the Consumer Financial Protection Bureau, and state regulators, whose policies, regulations, and enforcement actions could affect CTBI’s results.  These statements are representative only on the date hereof, and CTBI undertakes no obligation to update any forward-looking statements made.

PART I - FINANCIAL INFORMATION

Item 1. Condensed Consolidated Financial Statements

The accompanying information has not been audited by our independent registered public accountants; however, in the opinion of management such information reflects all adjustments necessary for a fair presentation of the results for the interim period.  All such adjustments are of a normal and recurring nature.

The accompanying condensed consolidated financial statements are presented in accordance with the requirements of Form 10-Q and consequently do not include all of the disclosures normally required by accounting principles generally accepted in the United States of America or those normally made in the Registrant’s annual report on Form 10-K.  Accordingly, the reader of the Form 10-Q should refer to the Registrant’s Form 10-K for the year ended December 31, 2022 for further information in this regard.

1

Community Trust Bancorp, Inc.

Condensed Consolidated Balance Sheets

(dollars in thousands)	(unaudited) June 30 2023			December 31 2022
Assets:
Cash and due from banks	$	48,915		$	51,306
Interest bearing deposits		57,630			77,380
Federal funds sold		3,000			0
Cash and cash equivalents		109,545			128,686
Certificates of deposit in other banks		245			245
Debt securities available-for-sale at fair value (amortized cost of $1,362,748 and $1,430,605, respectively)		1,201,253			1,256,226
Equity securities at fair value		2,545			2,166
Loans held for sale		238			109
Loans		3,929,695			3,709,290
Allowance for credit losses		(48,018	)		(45,981	)
Net loans		3,881,677			3,663,309
Premises and equipment, net		42,911			42,633
Operating right-of-use assets		13,476			13,809
Finance right-of-use assets		3,202			3,262
Federal Home Loan Bank stock		6,545			6,676
Federal Reserve Bank stock		4,887			4,887
Goodwill		65,490			65,490
Bank owned life insurance		93,775			92,746
Mortgage servicing rights		8,230			8,468
Other real estate owned		2,047			3,671
Deferred tax asset		34,591			39,878
Accrued interest receivable		20,257			19,592
Other assets		29,884			28,463
Total assets	$	5,520,798		$	5,380,316
Liabilities and shareholders’ equity:
Deposits:
Noninterest bearing	$	1,361,078		$	1,394,915
Interest bearing		3,155,582			3,031,228
Total deposits		4,516,660			4,426,143
Repurchase agreements		229,020			215,431
Federal funds purchased		500			500
Advances from Federal Home Loan Bank		345			355
Long-term debt		64,350			57,841
Operating lease liability		13,843			14,160
Finance lease liability		3,474			3,468
Accrued interest payable		5,624			2,237
Other liabilities		26,857			32,134
Total liabilities		4,860,673			4,752,269
Shareholders’ equity:
Preferred stock, 300,000 shares authorized and unissued		-			-
Common stock, $5.00 par value, shares authorized 25,000,000; shares issued and outstanding 2023 – 17,983,700; 2022 – 17,918,280		89,918			89,591
Capital surplus		229,943			229,012
Retained earnings		461,578			438,596
Accumulated other comprehensive loss, net of tax		(121,314	)		(129,152	)
Total shareholders’ equity		660,125			628,047
Total liabilities and shareholders’ equity	$	5,520,798		$	5,380,316

See notes to condensed consolidated financial statements.

2

Community Trust Bancorp, Inc.

Condensed Consolidated Statements of Income and Comprehensive Income (Loss)

(unaudited)

	Three Months Ended						Six Months Ended
	June 30						June 30
(in thousands except per share data)	2023			2022			2023		2022
Interest income:
Interest and fees on loans, including loans held for sale	$	55,822		$	39,234		$	107,769	$	77,401
Interest and dividends on securities
Taxable		6,811			4,944			13,569		9,328
Tax exempt		669			752			1,351		1,524
Interest and dividends on Federal Reserve Bank and Federal Home Loan Bank stock		172			134			346		248
Interest on Federal Reserve Bank deposits		1,289			273			2,639		355
Other, including interest on federal funds sold		64			15			148		23
Total interest income		64,827			45,352			125,822		88,879
Interest expense:
Interest on deposits		18,462			3,847			32,853		6,801
Interest on repurchase agreements and federal funds purchased		2,190			336			3,806		590
Interest on advances from Federal Home Loan Bank		7			1			50		1
Interest on long-term debt		1,089			378			2,118		665
Total interest expense		21,748			4,562			38,827		8,057
Net interest income		43,079			40,790			86,995		80,822
Provision for credit losses		2,009			77			3,125		952
Net interest income after provision for credit losses		41,070			40,713			83,870		79,870
Noninterest income:
Deposit related fees		7,513			7,263			14,800		14,009
Gains on sales of loans, net		115			519			236		1,116
Trust and wealth management income		3,351			3,198			6,430		6,446
Loan related fees		1,197			1,415			2,042		3,477
Bank owned life insurance		735			702			1,593		1,393
Brokerage revenue		388			459			736		1,049
Securities gains (losses)		165			(225	)		383		(126	)
Other noninterest income		1,292			1,170			2,218		2,102
Total noninterest income		14,756			14,501			28,438		29,466
Noninterest expense:
Officer salaries and employee benefits		3,574			4,239			7,726		8,121
Other salaries and employee benefits		14,731			14,295			29,487		27,951
Occupancy, net		2,181			2,120			4,483		4,365
Equipment		714			636			1,440		1,245
Data processing		2,383			2,095			4,686		4,296
Bank franchise tax		419			416			838		831
Legal fees		381			348			649		649
Professional fees		531			536			1,079		1,102
Advertising and marketing		704			659			1,524		1,411
FDIC insurance		610			358			1,216		713
Other real estate owned provision and expense		61			43			180		396
Repossession expense		98			131			329		231
Amortization of limited partnership investments		598			747			1,195		1,480
Other noninterest expense		4,040			3,355			8,083		6,546
Total noninterest expense		31,025			29,978			62,915		59,337
Income before income taxes		24,801			25,236			49,393		49,999
Income taxes		5,397			4,965			10,676		10,000
Net income		19,404			20,271			38,717		39,999
Other comprehensive income (loss):
Unrealized holding gains (losses) on debt securities available-for-sale:
Unrealized holding gains (losses) arising during the period		(11,828	)		(47,222	)		12,888		(125,786	)
Less: Reclassification adjustments for realized gains included in net income		0			(1	)		4		(1	)
Tax expense (benefit)		(2,951	)		(12,277	)		5,046		(32,704	)
Other comprehensive income (loss), net of tax		(8,877	)		(34,944	)		7,838		(93,081	)
Comprehensive income (loss)	$	10,527		$	(14,673	)	$	46,555	$	(53,082	)
Basic earnings per share	$	1.09		$	1.14		$	2.17	$	2.24
Diluted earnings per share	$	1.08		$	1.14		$	2.16	$	2.24
Weighted average shares outstanding-basic		17,884			17,835			17,877		17,827
Weighted average shares outstanding-diluted		17,890			17,843			17,885		17,838

See notes to condensed consolidated financial statements.

3

Consolidated Statements of Changes in Shareholders’ Equity

Quarterly

(unaudited)

(in thousands except per share and share amounts)	Common Shares			Common Stock			Capital Surplus		Retained Earnings			Accumulated Other Comprehensive Income (Loss), Net of Tax			Total
Balance, March 31, 2023		17,976,345		$	89,881		$	229,333	$	450,044		$	(112,437	)	$	656,821
Net income										19,404						19,404
Other comprehensive income (loss)													(8,877	)		(8,877	)
Cash dividends declared ($0.44 per share)										(7,870	)					(7,870	)
Issuance of common stock		8,604			43			237								280
Vesting of restricted stock		(1,249	)		(6	)		6								0
Stock-based compensation								367								367
Balance,  June 30, 2023		17,983,700		$	89,918		$	229,943	$	461,578		$	(121,314	)	$	660,125

(in thousands except per share and share amounts)	Common Shares		Common Stock		Capital Surplus			Retained Earnings			Accumulated Other Comprehensive Income (Loss), Net of Tax			Total
Balance, March 31, 2022		17,884,106	$	89,420	$	227,589		$	399,347		$	(62,985	)	$	653,371
Net income									20,271						20,271
Other comprehensive income (loss)												(34,944	)		(34,944	)
Cash dividends declared ($0.40 per share)									(7,134	)					(7,134	)
Issuance of common stock		6,075		30		221									251
Issuance of restricted stock		5,000		25		(25	)								0
Stock-based compensation						235									235
Balance, June 30, 2022		17,895,181	$	89,475	$	228,020		$	412,484		$	(97,929	)	$	632,050

See notes to condensed consolidated financial statements.

4

Consolidated Statements of Changes in Shareholders’ Equity

Year-to-Date
(unaudited)

(in thousands except per share and share amounts)	Common Shares			Common Stock			Capital Surplus			Retained Earnings			Accumulated Other Comprehensive Income (Loss), Net of Tax			Total
Balance, January 1, 2023		17,918,280		$	89,591		$	229,012		$	438,596		$	(129,152	)	$	628,047
Net income											38,717						38,717
Other comprehensive income (loss)														7,838			7,838
Cash dividends declared ($0.88 per share)											(15,735	)					(15,735	)
Issuance of common stock		34,722			174			384									558
Issuance of restricted stock		52,865			264			(264	)								0
Vesting of restricted stock		(21,377	)		(107	)		107									0
Forfeiture of restricted stock		(790	)		(4	)		4									0
Stock-based compensation								700									700
Balance, June 30, 2023		17,983,700		$	89,918		$	229,943		$	461,578		$	(121,314	)	$	660,125

(in thousands except per share and share amounts)	Common Shares			Common Stock			Capital Surplus			Retained Earnings			Accumulated Other Comprehensive Income (Loss), Net of Tax			Total
Balance, January 1, 2022		17,843,081		$	89,215		$	227,085		$	386,750		$	(4,848	)	$	698,202
Net income											39,999						39,999
Other comprehensive income (loss)														(93,081	)		(93,081	)
Cash dividends declared ($0.80 per share)											(14,265	)					(14,265	)
Issuance of common stock		38,566			193			306									499
Issuance of restricted stock		40,438			202			(202	)								0
Vesting of restricted stock		(26,904	)		(135	)		135									0
Stock-based compensation								696									696
Balance, June 30, 2022		17,895,181		$	89,475		$	228,020		$	412,484		$	(97,929	)	$	632,050

See notes to condensed consolidated financial statements.

5

Community Trust Bancorp, Inc.

Condensed Consolidated Statements of Cash Flows

(unaudited)

	Six Months Ended
	June 30
(in thousands)	2023			2022
Cash flows from operating activities:
Net income	$	38,717		$	39,999
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		2,561			2,560
Deferred taxes		242			306
Stock-based compensation		788			742
Provision for credit losses		3,125			952
Write-downs of other real estate owned and other repossessed assets		106			269
Gains on sale of mortgage loans held for sale		(236	)		(1,116	)
Securities (gains)/losses		(4	)		1
Fair value adjustments in equity securities		(379	)		125
Gains on sale of assets, net		(325	)		(43	)
Proceeds from sale of mortgage loans held for sale		9,098			49,301
Funding of mortgage loans held for sale		(8,991	)		(46,489	)
Amortization of securities premiums and discounts, net		1,454			3,341
Change in cash surrender value of bank owned life insurance		(1,029	)		(878	)
Changes in lease liabilities		(678	)		(894	)
Mortgage servicing rights:
Fair value adjustments		334			(994	)
New servicing assets created		(96	)		(452	)
Changes in:
Accrued interest receivable		(665	)		(386	)
Other assets		(1,421	)		(154	)
Accrued interest payable		3,387			847
Other liabilities		(5,364	)		(855	)
Net cash provided by operating activities		40,624			46,182
Cash flows from investing activities:
Securities available-for-sale (AFS):
Purchase of AFS securities		(8,820	)		(178,054	)
Proceeds from sales of AFS securities		18,561			0
Proceeds from prepayments, calls, and maturities of AFS securities		56,666			102,230
Change in loans, net		(220,647	)		(149,504	)
Purchase of premises and equipment		(2,081	)		(2,262	)
Proceeds from sale and retirement of premises and equipment		296			0
Proceeds from sale of stock by Federal Home Loan Bank		131			0
Proceeds from sale of other real estate owned and repossessed assets		739			888
Additional investment in other real estate owned and repossessed assets		(40	)		(73	)
Proceeds from settlement of bank owned life insurance		0			1
Net cash used in investing activities		(155,195	)		(226,774	)
Cash flows from financing activities:
Change in deposits, net		90,517			128,636
Change in repurchase agreements and federal funds purchased, net		13,589			(32,355	)
Proceeds from Federal Home Loan Bank advances		100,000			20,000
Payments on advances from Federal Home Loan Bank		(100,010	)		(20,010	)
Payment of finance lease liabilities		0			(12	)
Proceeds from long-term debt/other borrowings		6,563			0
Repayment of long-term debt/other borrowings		(54	)		0
Issuance of common stock		558			499
Dividends paid		(15,733	)		(14,256	)
Net cash provided by financing activities		95,430			82,502
Net decrease in cash and cash equivalents		(19,141	)		(98,090	)
Cash and cash equivalents at beginning of period		128,686			311,756
Cash and cash equivalents at end of period	$	109,545		$	213,666

Supplemental disclosures:
Income taxes paid	$	12,308	$	8,710
Interest paid		35,440		7,210
Non-cash activities:
Loans to facilitate the sale of other real estate owned and repossessed assets		1,022		935
Common stock dividends accrued, paid in subsequent quarter		281		257
Real estate acquired in settlement of loans		175		444
Right-of-use assets obtained in exchange for new operating lease liabilities		364		405

See notes to condensed consolidated financial statements.

6

Community Trust Bancorp, Inc.

Notes to Condensed Consolidated Financial Statements (unaudited)

Note 1 - Summary of Significant Accounting Policies

In the opinion of management, the unaudited condensed consolidated financial statements include all adjustments (which consist of normal recurring adjustments) necessary, to present fairly the condensed consolidated financial position as of June 30, 2023, the results of operations, other comprehensive income (loss), and changes in shareholders’ equity for the three and six months ended June 30, 2023 and 2022 and the cash flows for the six months ended June 30, 2023 and 2022.  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, other comprehensive income (loss), and changes in shareholders’ equity for the three and six months ended June 30, 2023 and 2022 and the cash flows for the six months ended June 30, 2023 and 2022 are not necessarily indicative of the results to be expected for the full year.  The condensed consolidated balance sheet as of December 31, 2022 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, 2022, included in our annual report on Form 10-K.

Principles of Consolidation – The unaudited condensed consolidated financial statements include the accounts of CTBI and its separate and distinct, wholly owned subsidiaries Community Trust Bank, Inc. (“CTB”) and Community Trust and Investment Company.  All significant intercompany transactions have been eliminated in consolidation.

New Accounting Standards –

➢       Facilitation of the Effects of Reference Rate Reform on Financial Reporting – In December 2022, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2022-06, Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848, which extends the period of time preparers can utilize the reference rate reform relief guidance.  The amendments in ASU No. 2022-06 are effective for all entities upon issuance.  In 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional guidance to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting.  The objective of the guidance in Topic 848 is to provide relief during the temporary transition period, so the FASB included a sunset provision within Topic 848 based on expectations of when the London Interbank Offered Rate (“LIBOR”) would cease being published.  The amendments in ASU No. 2020-04 provide optional guidance for a limited time to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting and provide optional expedients and exceptions for applying generally accepted accounting principles (“GAAP”) to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met.  This ASU applies only to contracts and hedging relationships that reference LIBOR or another reference rate expected to be discontinued due to reference rate reform.  The expedients and exceptions provided by the amendments do not apply to contract modifications made and hedging relationships entered into or evaluated after December 31, 2022.  In 2021, the UK Financial Conduct Authority delayed the intended cessation date of certain tenors of USD LIBOR to June 30, 2023. To ensure the relief in Topic 848 covers the period of time during which a significant number of modifications may take place, ASU No. 2022-06 defers the sunset date of Topic 848 from December 31, 2022, to December 31, 2024, after which entities will no longer be permitted to apply the relief in Topic 848.  At this time, we do not anticipate any material adverse impact to our business operation or financial results during the period of transition.

7

➢       Troubled Debt Restructurings and Vintage Disclosures – In February 2022, the FASB issued ASU 2022-02, Financial Instruments – Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures.  The amendments in this ASU eliminate the accounting guidance for troubled debt restructurings (“TDRs”) by creditors in Subtopic 310-40, Receivables—Troubled Debt Restructurings by Creditors, while enhancing disclosure requirements for certain loan refinancings and restructurings by creditors when a borrower is experiencing financial difficulty.  Specifically, rather than applying the recognition and measurement guidance for TDRs, an entity must apply the loan refinancing and restructuring guidance in paragraphs 310-20-35-9 through 35-11 to determine whether a modification results in a new loan or a continuation of an existing loan.   Additionally, for public business entities, the amendments in this ASU require that an entity disclose current-period gross write-offs by year of origination for financing receivables and net investments in leases within the scope of Subtopic 326-20, Financial Instruments—Credit Losses—Measured at Amortized Cost, in the vintage disclosures required by paragraph 326-20-50-6.  The amendments in the ASU have been implemented and did not have a  significant impact to our consolidated financial statements.

➢       Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions – In June 2022, the FASB issued ASU 2022-03, Fair Value Measurement Topic 820: Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions.  The FASB issued this ASU to (1) clarify the guidance in Topic 820, Fair Value Measurement, when measuring the fair value of an equity security subject to contractual restrictions that prohibit the sale of an equity security, (2) amend a related illustrative example, and (3) introduce new disclosure requirements for equity securities subject to contractual sale restrictions that are measured at fair value in accordance with Topic 820.  The amendments in this ASU clarify that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, is not considered in measuring fair value.  The amendments also clarify that an entity cannot, as a separate unit of account, recognize and measure a contractual sale restriction.  The amendments in this ASU also require the following disclosures for equity securities subject to contractual sale restrictions: (1) the fair value of equity securities subject to contractual sale restrictions reflected in the balance sheet; (2) the nature and remaining duration of the restriction(s); and (3) the circumstances that could cause a lapse in the restriction(s).  For public business entities, the amendments in this ASU are effective for fiscal years beginning after December 15, 2023, and interim periods within those fiscal years.  Early adoption is permitted for both interim and annual financial statements that have not yet been issued or made available for issuance. We do not anticipate a significant impact to our consolidated financial statements.

            ➢         FASB Improves the Accounting for Investments in Tax Credit Structures – The FASB issued, ASU No. 2023-02, Investments—Equity Method and Joint Ventures (Topic 323): Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method, which is intended to improve the accounting and disclosures for investments in tax credit structures. This ASU is a consensus of the FASB’s Emerging Issues Task Force (EITF).  This ASU allows reporting entities to elect to account for qualifying tax equity investments using the proportional amortization method, regardless of the program giving rise to the related income tax credits. This ASU responds to stakeholder feedback that the proportional amortization method provides investors and other allocators of capital with a better understanding of the returns from investments that are made primarily for the purpose of receiving income tax credits and other income tax benefits.  Reporting entities were previously permitted to apply the proportional amortization method only to qualifying tax equity investments in low-income housing tax credit (“LIHTC”) structures. In recent years, stakeholders asked the FASB to extend the application of the proportional amortization method to qualifying tax equity investments that generate tax credits through other programs, which resulted in the EITF addressing this issue.  For public business entities, the amendments are effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2024, including interim periods within those fiscal years. Early adoption is permitted for all entities in any interim period; however, we do not plan to early adopt. We do not anticipate a significant impact to our consolidated financial statements.

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Significant Accounting Policies –

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 our 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 significant accounting policies:

➢        Investments – Management determines the classification of securities at purchase.  We classify debt securities into held-to-maturity, trading, or available-for-sale categories.  Held-to-maturity (“HTM”) securities are those which we have the positive intent and ability to hold to maturity and are reported at amortized cost.  In accordance with FASB Accounting Standards Codification (“ASC”) 320, Investments – Debt Securities, investments in debt securities that are not classified as held-to-maturity 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 HTM securities) shall be classified as available-for-sale (“AFS”) securities.

We do not have any securities that are classified as trading securities.  AFS 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.

For AFS debt securities in an unrealized loss position, we evaluate the securities to determine whether the decline in the fair value below the amortized cost basis (impairment) is due to credit-related factors or non-credit related factors.  Any impairment that is not credit-related is recognized in accumulated other comprehensive income, net of tax.  Credit-related impairment is recognized as an allowance for credit losses (“ACL”) for AFS debt securities on the balance sheet, limited to the amount by which the amortized cost basis exceeds the fair value, with a corresponding adjustment to earnings.  Accrued interest receivable on AFS debt securities is excluded from the estimate of credit losses.  Both the ACL for AFS debt securities and the adjustment to net income may be reversed if conditions change.  However, if we intend to sell an impaired AFS debt security or more likely than not will be required to sell such a security before recovering its amortized cost basis, the entire impairment amount would be recognized in earnings with a corresponding adjustment to the security’s amortized cost basis.  Because the security’s amortized cost basis is adjusted to fair value, there is no ACL for AFS debt securities in this situation.

In evaluating AFS debt securities in unrealized loss positions for impairment and the criteria regarding its intent or requirement to sell such securities, we consider the extent to which fair value is less than amortized cost, whether the securities are issued by the federal government or its agencies, whether downgrades by bond rating agencies have occurred, and the results of reviews of the issuers’ financial condition, among other factors.  There were no credit related factors underlying unrealized losses on AFS debt securities at June 30, 2023 and December 31, 2022, therefore, no ACL for AFS securities was recorded.

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Changes in the ACL for AFS debt securities are recorded as expense.  Losses are charged against the ACL for AFS debt securities when management believes the uncollectability of an AFS debt security is confirmed or when either of the criteria regarding intent or requirement to sell is met.

Gains or losses on disposition of debt securities are computed by specific identification for those securities.  Interest and dividend income, adjusted by amortization of purchase premium or discount, is included in earnings.

HTM securities are subject to an allowance for lifetime expected credit losses, determined by adjusting historical loss information for current conditions and reasonable and supportable forecasts.  The forward-looking evaluation of lifetime expected losses will be performed on a pooled basis for debt securities that share similar risk characteristics.  These allowances for expected losses must be made by the holder of the HTM debt security when the security is purchased.  At June 30, 2023 and 2022, CTBI held no securities designated as HTM.

CTBI accounts for equity securities in accordance with ASC 321, Investments – Equity Securities. ASC 321 requires equity investments (except those accounted for under the equity method and those that result in the consolidation of the investee) to be measured at fair value, with changes in fair values recognized in net income.

Equity securities with a readily determinable fair value are required to be measured at fair value, with changes in fair value recognized in net income.  Equity securities without a readily determinable fair value are carried at cost, less any impairment, if any, plus or minus changes resulting from observable price changes for identical or similar investments.  As permitted by ASC 321-10-35-2, CTBI can make an irrevocable election to subsequently measure an equity security without a readily determinable fair value, and all identical or similar investments of the same issuer, including future purchases of identical or similar investments of the same issuer, at fair value.  CTBI has made this election for our Visa Class B equity securities.  The fair value of these securities was determined by a third party service provider using Level 3 inputs as defined in ASC 820, Fair Value Measurement, and changes in fair value are recognized in income.

➢        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 credit losses, and unamortized deferred fees or costs and premiums.  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. With the implementation of ASU 2022-02 described above in the New Accountings Standards, TDRs have been eliminated while enhanced disclosure requirements have been implemented for certain loan modifications when a borrower is experiencing financial difficulty.

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, or commitments as a yield adjustment.

➢        Allowance for Credit Losses – CTBI accounts for the allowance for credit losses under ASC 326. CTBI measures expected credit losses of financial assets on a collective (pool) basis using loss-rate methods when the financial assets share similar risk characteristics. Loans that do not share risk characteristics are evaluated on an individual basis. Regardless of an initial measurement method, once it is determined that foreclosure is probable, the allowance for credit losses is measured based on the fair value of the collateral as of the measurement date. As a practical expedient, the fair value of the collateral may be used for a loan when determining the allowance for credit losses for which the repayment is expected to be provided substantially through the operation or sale of the collateral when the borrower is experiencing financial difficulty. The fair value shall be adjusted for selling costs when foreclosure is probable. For collateral-dependent financial assets, the credit loss expected may be zero if the fair value less costs to sell exceed the amortized cost of the loan. Loans shall not be included in both collective assessments and individual assessments.

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In the event that collection of principal becomes uncertain, CTBI has policies in place to reverse accrued interest in a timely manner. Therefore, CTBI elected  ASU 2019-04 which allows that accrued interest would continue to be presented separately and not part of the amortized cost of the loan. The methodology used by CTBI is developed using the current loan balance, which is then compared to amortized cost balances to analyze the impact. The difference in amortized cost basis versus consideration of loan balances impacts the allowance for credit losses calculation by 1 basis point and is considered immaterial. The primary difference is for indirect lending premiums.

We maintain an ACL at a level that is appropriate to cover estimated credit losses on individually evaluated loans, as well as estimated credit losses inherent in the remainder of the loan and lease portfolio.  Credit losses are charged and recoveries are credited to the ACL.

We utilize an internal risk grading system for commercial credits. Those credits that meet the following criteria are subject to individual evaluation: the loan has an outstanding bank share balance of $1 million or greater and has a criticized risk rating and meets one of the following criteria: (i) is in nonaccrual status, (ii) the borrower is experiencing financial difficulty with significant payment delay, or (iii) is 90 days or more past due. The borrower’s cash flow, adequacy of collateral coverage, and other options available to CTBI, including legal remedies, are evaluated. 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 loan segments not subject to individual evaluation.

Homogenous loans, such as consumer installment, residential mortgages, and home equity lines are not individually risk graded.  The associated ACL for these loans is measured in pools with similar risk characteristics under ASC 326.

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 nonaccrual and the loan is charged down to the value of the collateral less estimated cost to sell. For commercial loans greater than $1 million that are categorized as individually evaluated based on the criteria listed above, a specific reserve is established if a loss is determined to be possible and then charged-off once it is probable. When the foreclosed collateral has been legally assigned to CTBI, the estimated fair value of the collateral less costs to sell is then transferred to other real estate owned or other repossessed assets, and a charge-off is taken for any remaining balance.  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 (five 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.

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Prior to June 30, 2023, loss rate methodologies were used by CTBI.  Weighted average life calculations were completed as a tool to determine the life of CTBI’s various loan segments.  Vintage modeling was used to determine the life of loan losses for consumer and residential real estate loans, and static pool modeling was used to determine the life of loan losses for commercial loan segments.  Historical loss rates for loans were adjusted for significant factors that, in management’s judgment, reflect the impact of any current conditions on loss recognition.  Forecasting factors including unemployment rates and industry specific forecasts for industries in which our total exposure is 5% of capital or greater were also included as factors in the ACL model.

During the quarter ended June 30, 2023, CTBI implemented third party software and the determination was made to utilize discounted cash flow loss rate methodologies for all loan segments.  Within the discount cash flow calculation, an effective yield of the instrument is calculated, net of the impacts of prepayment assumptions, and the instrument expected cash flows, modeled considering probability of default (PD) and segment-specific loss given default (LGD) risk factors, are then discounted at that effective yield to produce an instrument-level net present value (NPV) of expected cash flows.  An allowance for credit loss is established for the difference between the instrument’s NPV and amortized cost basis.  Any changes in NPV between periods is recorded as provision for credit losses.  The modeling of expected prepayment speeds, curtailment rates, and time to recovery are based on historical internal data and adjusted, if necessary, based on the reasonable and supportable forecast of economic conditions.  Management incorporates qualitative factors to loss estimates used to derive CTBI’s total ACL including delinquency trends, current economic conditions and trends, strength of supervision and administration of the loan portfolio, levels of underperforming loans, and underwriting exceptions.  Forecast factors were expanded to include gross domestic product, retail and food service sales, and S&P/Case-Shiller US National Home Price Index, while industry concentrations was added as a qualitative factor.  Management continually reevaluates the other subjective factors included in our ACL analysis.

➢        Goodwill and Core Deposit Intangible – We evaluate total goodwill and core deposit intangible for impairment, based upon ASC 350, Intangibles-Goodwill and Other, using fair value techniques including multiples of price/equity.  Goodwill and core deposit intangible are evaluated for impairment on an annual basis or as other events may warrant.

The balance of goodwill, at $65.5 million, has not changed since January 1, 2015.

➢        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 our consolidated financial statements. During the six months ended June 30, 2023 and 2022, CTBI has not recognized a significant amount of interest expense or penalties in connection with income taxes.

➢        Estimated Credit Losses on Off-Balance Sheet Credit Exposures Recognized as Other Liabilities – CTBI estimates expected credit losses over the contractual period in which it has exposure to credit risk via a contractual obligation to extend credit, unless that obligation is unconditionally cancellable by CTBI.  The allowance for credit losses on off-balance sheet credit exposures recognized in other liabilities, is adjusted as an expense in other non-interest expense. The estimate includes consideration of the likelihood that funding will occur and an estimate of expected credit losses on commitments expected to be funded over their estimated lives.  Estimating credit losses on unfunded commitments requires CTBI to consider the following categories of off-balance sheet credit exposure: unfunded commitments to extend credit, unfunded lines of credit, and standby letters of credit.  Each of these unfunded commitments is then analyzed for a probability of funding to calculate a probable funding amount.  The life of loan loss factor by related portfolio segment from the loan allowance for credit loss calculation is then applied to the probable funding amount to calculate the estimated credit losses on off-balance sheet credit exposures recognized as other liabilities.

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Note 2 – Stock-Based Compensation

Restricted stock expense for the three and six months ended June 30, 2023 was $411 thousand and $788 thousand, respectively, including $44 thousand and $88 thousand, respectively, in dividends paid for those periods.  Restricted stock expense for the three and six months ended June 30, 2022 was $258 thousand and $742 thousand, respectively, including $24 thousand and $46 thousand, respectively, in dividends paid for those periods.  As of June 30, 2023, there was a total of $3.7 million of unrecognized compensation expense related to restricted stock grants that will be recognized as expense as the awards vest over a weighted average period of 3.4 years. There were no shares of restricted stock granted during the three months ended June 30, 2023, but there were 5,000 shares of restricted stock granted during the three months ended June 30, 2022.  There were 52,865 and 40,438 shares of restricted stock granted during the six months ended June 30, 2023 and 2022, respectively.  The restricted stock was issued pursuant to the terms of CTBI’s 2015 Stock Ownership Incentive Plan. The restrictions on the restricted stock will lapse ratably over four years, except for the 5,000 management retention restricted stock award granted in April 2022 which will vest at the end of five years, subject to such employee’s continued employment.  However, in the event of certain participant employee termination events occurring within 24 months of a change in control of CTBI or the death of the participant, the restrictions will lapse, and in the event of the participant’s disability, the restrictions will lapse on a pro rata basis.  The Compensation Committee will have discretion to review and revise restrictions applicable to a participant’s restricted stock in the event of the participant’s retirement.There were no shares of restricted stock forfeited during the three months ended June 30, 2023, but there were 790 shares of restricted stock forfeited during the six months ended June 30, 2023.  No shares were forfeited during the three and six months ended June 30, 2022.

There was no compensation expense related to stock option grants for the three and six months ended June 30, 2023 and 2022. As of June 30, 2023, there was no unrecognized compensation expense related to unvested stock option awards, as all stock option awards have fully vested.  There were no stock options granted in the first six months of 2023 or 2022.

Note 3 – Securities

Debt securities are classified into HTM and AFS categories.  HTM securities are those that CTBI has the positive intent and ability to hold to maturity and are reported at amortized cost.  AFS securities are those that CTBI may decide to sell if needed for liquidity, asset-liability management or other reasons.  AFS securities are reported at fair value, with unrealized gains or losses included as a separate component of equity, net of tax.  As of June 30, 2023 and December 31, 2022, CTBI had no HTM securities.

The amortized cost and fair value of debt securities at June 30, 2023 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	$	400,148	$	143	$	(34,897	)	$	365,394
State and political subdivisions		314,048		2		(54,225	)		259,825
U.S. government sponsored agency mortgage-backed securities		558,964		1		(71,066	)		487,899
Asset-backed securities		89,588		0		(1,453	)		88,135
Total available-for-sale securities	$	1,362,748	$	146	$	(161,641	)	$	1,201,253

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The amortized cost and fair value of debt securities at December 31, 2022 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	$	418,579	$	212	$	(36,859	)	$	381,932
State and political subdivisions		326,746		32		(61,676	)		265,102
U.S. government sponsored agency mortgage-backed securities		593,917		1		(73,833	)		520,085
Asset-backed securities		91,363		0		(2,256	)		89,107
Total available-for-sale securities	$	1,430,605	$	245	$	(174,624	)	$	1,256,226

The amortized cost and fair value of debt securities at June 30, 2023 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	$	33,089	$	32,613
Due after one through five years		336,248		305,693
Due after five through ten years		169,173		145,760
Due after ten years		175,686		141,153
U.S. government sponsored agency mortgage-backed securities		558,964		487,899
Asset-backed securities		89,588		88,135
Total debt securities	$	1,362,748	$	1,201,253

During the three months ended June 30, 2023, we had an unrealized gain of $165 thousand from the fair value adjustment of equity securities.  During the three months ended June 30, 2022, we had a net securities loss of $225 thousand, consisting of a pre-tax loss of $1 thousand realized on calls of AFS securities and an unrealized loss of $224 thousand from the fair value adjustment of equity securities.

During the six months ended June 30, 2023, we had a net securities gain of $383 thousand, consisting of a pre-tax gain of $4 thousand realized on sales and calls of AFS securities and an unrealized gain of $379 thousand from the fair value adjustment of equity securities.  During the six months ended June 30, 2022, we had a net securities loss of $126 thousand, consisting of a pre-tax loss of $1 thousand realized on calls of AFS securities and an unrealized loss of $125 thousand from the fair 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 June 30, 2023 were $2.5 million, as a result of a $165 thousand increase in the fair value in the second quarter 2023.  The fair value of equity securities decreased $224 thousand in the second quarter 2022.  No equity securities were sold during the six months ended June 30, 2023 and 2022.

The amortized cost of securities pledged as collateral, to secure public deposits and for other purposes, was $744.4 million at June 30, 2023 and $725.0 million at December 31, 2022.

The amortized cost of securities sold under agreements to repurchase amounted to $342.9 million at June 30, 2023 and $316.9 million at December 31, 2022.

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CTBI evaluates its investment portfolio on a quarterly basis for impairment.  The analysis performed as of June 30, 2023 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 June 30, 2023 was 98.7% compared to 97.4% as of December 31, 2022.  The following table provides the amortized cost, gross unrealized losses, and fair value, aggregated by investment category and length of time the individual securities have been in a continuous unrealized loss position as of June 30, 2023 that are not deemed to have credit losses.  As stated above, CTBI had no HTM securities as of June 30, 2023.

Available-for-Sale

(in thousands)	Amortized Cost		Gross Unrealized Losses			Fair Value
Less Than 12 Months
U.S. Treasury and government agencies	$	7,188	$	(10	)	$	7,178
State and political subdivisions		34,386		(1,493	)		32,893
U.S. government sponsored agency mortgage-backed securities		51,640		(1,806	)		49,834
Asset-backed securities		0		0			0
Total <12 months temporarily impaired AFS securities		93,214		(3,309	)		89,905
12 Months or More
U.S. Treasury and government agencies		380,143		(34,887	)		345,256
State and political subdivisions		277,291		(52,732	)		224,559
U.S. government sponsored agency mortgage-backed securities		507,278		(69,260	)		438,018
Asset-backed securities		89,588		(1,453	)		88,135
Total ≥12 months temporarily impaired AFS securities		1,254,300		(158,332	)		1,095,968
Total
U.S. Treasury and government agencies		387,331		(34,897	)		352,434
State and political subdivisions		311,677		(54,225	)		257,452
U.S. government sponsored agency mortgage-backed securities		558,918		(71,066	)		487,852
Asset-backed securities		89,588		(1,453	)		88,135
Total temporarily impaired AFS securities	$	1,347,514	$	(161,641	)	$	1,185,873

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The analysis performed as of December 31, 2022 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 value, aggregated by investment category and length of time the individual securities have been in a continuous unrealized loss position as of December 31, 2022 that are not deemed to be other-than-temporarily impaired.  As stated above, CTBI had no HTM securities as of December 31, 2022.

Available-for-Sale

(in thousands)	Amortized Cost		Gross Unrealized Losses			Fair Value
Less Than 12 Months
U.S. Treasury and government agencies	$	144,305	$	(6,953	)	$	137,352
State and political subdivisions		94,277		(6,257	)		88,020
U.S. government sponsored agency mortgage-backed securities		139,314		(6,883	)		132,431
Asset-backed securities		38,882		(1,231	)		37,651
Total <12 months temporarily impaired AFS securities		416,778		(21,324	)		395,454
12 Months or More
U.S. Treasury and government agencies		249,424		(29,906	)		219,518
State and political subdivisions		225,019		(55,419	)		169,600
U.S. government sponsored agency mortgage-backed securities		454,357		(66,950	)		387,407
Asset-backed securities		52,480		(1,025	)		51,455
Total ≥12 months temporarily impaired AFS securities		981,280		(153,300	)		827,980
Total
U.S. Treasury and government agencies		393,729		(36,859	)		356,870
State and political subdivisions		319,296		(61,676	)		257,620
U.S. government sponsored agency mortgage-backed securities		593,671		(73,833	)		519,838
Asset-backed securities		91,362		(2,256	)		89,106
Total temporarily impaired AFS securities	$	1,398,058	$	(174,624	)	$	1,223,434

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 that we will be required to sell the investments before recovery of their amortized cost.

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Asset-Backed Securities

The unrealized losses in asset-backed 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.

Note 4 – Loans

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

(in thousands)	June 30 2023		December 31 2022
Hotel/motel	$	372,981	$	343,640
Commercial real estate residential		393,309		372,914
Commercial real estate nonresidential		787,598		762,349
Dealer floorplans		76,903		77,533
Commercial other		319,838		312,422
Commercial loans		1,950,629		1,868,858
Real estate mortgage		883,104		824,996
Home equity lines		132,033		120,540
Residential loans		1,015,137		945,536
Consumer direct		157,848		157,504
Consumer indirect		806,081		737,392
Consumer loans		963,929		894,896
Loans and lease financing	$	3,929,695	$	3,709,290

The loan portfolios presented above are net of unearned fees and unamortized premiums.  Unearned fees included above totaled $1.0 million as of June 30, 2023 and as of December 31, 2022, while the unamortized premiums on the indirect lending portfolio totaled $30.9 million as of June 30, 2023 and $28.5 million as of December 31, 2022.

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

Hotel/motel loans are a significant concentration for CTBI, representing approximately 9.5% of total loans. This industry has unique risk characteristics as it is highly susceptible to changes in the domestic and global economic environments, which can cause the industry to experience substantial volatility. Additionally, any hotel/motel construction loans would be included in this segment as CTBI’s construction loans are primarily completed as one loan going from construction to permanent financing. 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.

Commercial real estate residential loans are commercial purpose construction and permanent financed loans for commercial purpose 1-4 family/multi-family properties. 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.

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Commercial real estate nonresidential loans are secured by nonfarm, nonresidential 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. Construction for commercial real estate nonresidential loans are also included in this segment as these loans are generally one loan for construction to permanent financing.

Dealer floorplans consist of loans to dealerships to finance inventory and are collateralized under a blanket security agreement and without specific liens on individual units.  This risk is mitigated by the use of periodic inventory audits.  These audits are performed monthly and follow up is required on any out of compliance items identified.  These audits are subject to increasing frequency when fact patterns suggest more scrutiny is required.

 Commercial other loans consist of agricultural loans, receivable financing, 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 equipment, or other assets, although such loans may be uncollateralized but guaranteed.

Residential real estate loans are a mixture of fixed rate and adjustable rate first and second lien residential mortgage loans and also include real estate construction loans which are typically for owner-occupied properties.  The terms of the real estate construction loans are generally short-term with permanent financing upon completion.  As a policy, CTBI holds adjustable rate loans and sells the majority of our 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 primarily revolving adjustable rate credit lines secured by real property.

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

Consumer indirect loans are primarily fixed rate consumer 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 $0.2 million at June 30, 2023 and $0.1 million at December 31, 2022.

For periods ended June 30, 2022 and December 31, 2022, CTBI derived our ACL balance by using vintage modeling for the consumer and residential portfolios.  Static pool models incorporating losses by credit risk rating were developed to determine credit loss balances for the commercial loan segments.  Qualitative loss factors were based on CTBI’s judgment of delinquency trends, level of nonperforming loans, trend in loan losses, supervision and administration, quality control exceptions, and reasonable and supportable forecasts based on unemployment rates and industry concentrations.  CTBI determined that twelve months represented a reasonable and supportable forecast period and reverted back to a historical loss rate immediately.  CTBI leveraged economic projections from a reputable and independent third party to form its loss driver forecasts over the twelve-month forecast period.  Other internal and external indicators of economic forecasts were also considered by CTBI when developing the forecast metrics.  CTBI also had an inherent model risk allocation included in our ACL calculation to allow for certain known model limitations as well as other potential risks not quantified elsewhere.  One limitation was the inability to completely identify revolving line of credit within the commercial other segment.

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During the quarter ended June 30, 2023, CTBI implemented third party software for its ACL calculations.  During the implementation process, discounted cash flow modeling was chosen for all loan segments.  The primary reasons that contributed to this decision were:  Discounted cash flow (“DCF”) models allow for the effective incorporation of a reasonable and supportable forecast in a directionally consistent and objective manner; the analysis aligns well with other calculations outside of the ACL estimation which will mitigate model risk in other areas; and peer data is available for certain inputs if first -party data is not available or meaningful.  This change in modeling resulted in a shift in our reserve estimates as of June 30, 2023 as presented below:

(in thousands)	ACL Software June 30, 2023		CTBI Internal ACL Model June 30, 2023		Change in Allocation
Hotel/motel	$	5,192	$	6,038	$	(846	)
Commercial real estate residential		3,749		4,669		(920	)
Commercial real estate nonresidential		7,797		8,794		(997	)
Dealer floorplans		1,157		1,719		(562	)
Commercial other		6,176		4,547		1,629
Commercial loans reserve allocation		24,071		25,767		(1,696	)
Real estate mortgage		7,884		8,443		(559	)
Home equity lines		1,108		1,065		43
Residential loans reserve allocation		8,992		9,508		(516	)
Consumer direct		2,563		1,673		890
Consumer indirect		12,392		10,959		1,433
Consumer loans reserve allocation		14,955		12,632		2,323
Loans and lease financing allowance for credit loss	$	48,018		47,907	$	111

This change in reserve estimates  is related to life of loan and how it functions in a cash flow methodology versus the loss rate methodology previously used as consumer loans generally have longer lives than commercial loans.  Although commercial loans may estimate more probability of default/loss given default compared to consumer loans, their shorter exposures will yield lower reserves.  Additionally, there was a change in how some of the qualitative factors were applied using the new software with a switch from a geographical approach to a loan segment approach.

The following tables present the balance in the ACL for the periods ended June 30, 2023, December 31, 2022, and June 30, 2022:

	Three Months Ended June 30, 2023
(in thousands)	Beginning Balance		Provision Charged to Expense			Losses Charged Off			Recoveries		Ending Balance
ACL
Hotel/motel	$	5,287	$	(95	)	$	0		$	0	$	5,192
Commercial real estate residential		5,157		(1,384	)		(28	)		4		3,749
Commercial real estate nonresidential		9,010		(1,393	)		(9	)		189		7,797
Dealer floorplans		1,694		(537	)		0			0		1,157
Commercial other		4,782		2,387			(1,073	)		80		6,176
Real estate mortgage		7,917		10			(55	)		12		7,884
Home equity		1,044		76			(13	)		1		1,108
Consumer direct		1,746		807			(82	)		92		2,563
Consumer indirect		10,046		2,138			(693	)		901		12,392
Total	$	46,683	$	2,009		$	(1,953	)	$	1,279	$	48,018

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	Six Months Ended June 30, 2023
(in thousands)	Beginning Balance		Provision Charged to Expense			Losses Charged Off			Recoveries		Ending Balance
ACL
Hotel/motel	$	5,171	$	21		$	0		$	0	$	5,192
Commercial real estate residential		4,894		(1,198	)		(28	)		81		3,749
Commercial real estate nonresidential		9,419		(1,946	)		(9	)		333		7,797
Dealer floorplans		1,776		(619	)		0			0		1,157
Commercial other		5,285		1,971			(1,260	)		180		6,176
Real estate mortgage		7,932		31			(95	)		16		7,884
Home equity		1,106		12			(13	)		3		1,108
Consumer direct		1,694		912			(238	)		195		2,563
Consumer indirect		8,704		3,941			(2,075	)		1,822		12,392
Total	$	45,981	$	3,125		$	(3,718	)	$	2,630	$	48,018

	Year Ended December 31, 2022
(in thousands)	Beginning Balance		Provision Charged to Expense			Losses Charged Off			Recoveries		Ending Balance
ACL
Hotel/motel	$	5,080	$	307		$	(216	)	$	0	$	5,171
Commercial real estate residential		3,986		951			(92	)		49		4,894
Commercial real estate nonresidential		8,884		(154	)		(46	)		735		9,419
Dealer floorplans		1,436		340			0			0		1,776
Commercial other		4,422		947			(1,082	)		998		5,285
Real estate mortgage		7,637		466			(223	)		52		7,932
Home equity		866		257			(37	)		20		1,106
Consumer direct		1,951		(210	)		(609	)		562		1,694
Consumer indirect		7,494		2,001			(3,041	)		2,250		8,704
Total	$	41,756	$	4,905		$	(5,346	)	$	4,666	$	45,981

	Three Months Ended June 30, 2022
(in thousands)	Beginning Balance		Provision Charged to Expense			Losses Charged Off			Recoveries		Ending Balance
ACL
Hotel/motel	$	4,711	$	133		$	0		$	0	$	4,844
Commercial real estate residential		4,070		124			0			6		4,200
Commercial real estate nonresidential		9,169		(223	)		0			22		8,968
Dealer floorplans		1,519		(42	)		0			0		1,477
Commercial other		4,844		(285	)		(187	)		101		4,473
Real estate mortgage		7,662		586			(84	)		15		8,179
Home equity		819		71			(5	)		2		887
Consumer direct		1,787		(65	)		(175	)		74		1,621
Consumer indirect		7,728		(222	)		(377	)		566		7,695
Total	$	42,309	$	77		$	(828	)	$	786	$	42,344

20

	Six Months Ended June 30, 2022
(in thousands)	Beginning Balance		Provision Charged to Expense			Losses Charged Off			Recoveries		Ending Balance
ACL
Hotel/motel	$	5,080	$	(20	)	$	(216	)	$	0	$	4,844
Commercial real estate residential		3,986		234			(31	)		11		4,200
Commercial real estate nonresidential		8,884		(49	)		0			133		8,968
Dealer floorplans		1,436		41			0			0		1,477
Commercial other		4,422		193			(344	)		202		4,473
Real estate mortgage		7,637		683			(177	)		36		8,179
Home equity		866		38			(24	)		7		887
Consumer direct		1,951		(245	)		(345	)		260		1,621
Consumer indirect		7,494		77			(1,011	)		1,135		7,695
Total	$	41,756	$	952		$	(2,148	)	$	1,784	$	42,344

Using the ACL software, forecasts were expanded to include gross domestic product (GDP), retail sales and housing price index considerations.  CTBI leverages economic projections from the Federal Open Market Committee to obtain various forecasts for unemployment rate and gross domestic product, the PNC forecast for the Case-Shiller National Home Price Index, and the Wells Fargo forecast for the Advanced Retail Sales.  CTBI has elected to forecast the first four quarters of the credit loss estimate and revert to a long-run average of each considered economic factor as permitted in ASC 326-20-30-9 over four quarters.

All periods during the reasonable and supportable forecast period are utilizing a forecasted probability of default.  During the ACL software implementation, loss driver analysis was performed during which regression models were built relating default rates of the various segments to the economic factors noted above.  Historical loss data for both CTBI and segment-specific selected peers was incorporated from FFIEC call report data.  For loss given default, the Frye-Jacobs LGD estimation technique was utilized in the ACL software provided a risk curve that most approximates the asset class under consideration.  Management elected to evaluate internal prepayment experience over a trailing timeframe to determine the appropriate prepayment and curtailment rates to be used in the credit loss estimate.

CTBI continues to use management judgement for qualitative loss factors such as delinquency trends, supervision and administration, quality control exceptions, collateral values, and industry concentrations, although these factors are applied differently in the ACL software.  The software allows management to approve a “worst case” scenario or a maximum loss rate for each segment.  Qualitative dollars available for allocation then become the difference between the worst case and the ACL reserve estimate.  Each factor is then given a risk weighting that is applied to determine a basis point allocation.  The previous model only allowed for a specific basis point allocation determined by management.  In addition to these factors, management has added risk factors related to changes in the nature and volume of the portfolio and terms of loans and changes in the experience, depth, and ability of lending management.  The previous significant event factor has been expanded to reflect changes in international, national, regional and local conditions, as well as the effect of other external factors as noted below.  The previous factors for inherent model risk and levels of nonperforming loans were not incorporated into the ACL software as separate qualitative factors.   The revised qualitative loss factors are as follows:

• Changes in delinquency trends by loan segment

• Changes in international, national, regional, and local conditions

• The effect of other external factors (i.e. competition, legal and regulatory requirements) on the level of estimated credit losses

• The existence and effect of any concentrations of credit and changes in the levels of such concentrations

• A supervision and administration allocation based on CTBI’s loan review process

• Exceptions in lending policies and procedures as measured by quarterly loan portfolio exceptions reports

• Changes in the nature and volume of the portfolio and terms of loans

• Changes in the experience, depth, and ability of lending management

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Economic forecast factors utilized in the estimate improved quarter over quarter and the slight reduction in reserve requirements from 1.24% to 1.22% is reflective of this improvement.  Management continues to note the continued impact of global uncertainty, the current rate of inflation, the significant rising rate environment, and the fact that there is no immediate end foreseen, and these conditions are now part of qualitative factors noted above.  As in previous quarters an allocation was made for delinquency trends, industry concentrations, supervisory and administration, loan exceptions, and collateral values.

Our provision for credit losses for the quarter increased $0.9 million from prior quarter and $1.9 million from prior year same quarter.  Our reserve coverage (allowance for credit losses to nonperforming loans) at June 30, 2023 was 408.9%, compared to 382.3% at March 31, 2023 and 305.9% at June 30, 2022.  Our credit loss reserve as a percentage of total loans outstanding at June 30, 2023 was 1.22% compared to 1.24% at March 31, 2023 and 1.19% at June 30, 2022.

Refer to Note 1 to the condensed consolidated financial statements for further information regarding our nonaccrual policy.  Nonaccrual loans and loans 90 days past due and still accruing segregated by class of loans for both June 30, 2023 and December 31, 2022 were as follows:

	June 30, 2023
(in thousands)	Nonaccrual Loans with No ACL		Nonaccrual Loans with ACL		90+ and Still Accruing		Total Nonperforming Loans
Hotel/motel	$	0	$	0	$	0	$	0
Commercial real estate residential		0		322		712		1,034
Commercial real estate nonresidential		0		982		300		1,282
Commercial other		0		753		277		1,030
Total commercial loans		0		2,057		1,289		3,346
Real estate mortgage		0		3,093		4,206		7,299
Home equity lines		0		195		459		654
Total residential loans		0		3,288		4,665		7,953
Consumer direct		0		0		6		6
Consumer indirect		0		0		439		439
Total consumer loans		0		0		445		445
Loans and lease financing	$	0	$	5,345	$	6,399	$	11,744

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	December 31, 2022
(in thousands)	Nonaccrual Loans with No ACL		Nonaccrual Loans with ACL		90+ and Still Accruing		Total Nonperforming Loans
Hotel/motel	$	0	$	0	$	0	$	0
Commercial real estate residential		0		355		258		613
Commercial real estate nonresidential		0		1,116		1,947		3,063
Commercial other		0		982		369		1,351
Total commercial loans		0		2,453		2,574		5,027
Real estate mortgage		0		4,069		4,929		8,998
Home equity lines		0		291		487		778
Total residential loans		0		4,360		5,416		9,776
Consumer direct		0		0		41		41
Consumer indirect		0		0		465		465
Total consumer loans		0		0		506		506
Loans and lease financing	$	0	$	6,813	$	8,496	$	15,309

Discussion of the Nonaccrual Policy

The accrual of interest income on loans 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 the collection of interest is doubtful.  Cash payments received on nonaccrual loans generally are applied against principal, and interest income is only recorded once principal recovery is reasonably assured.  Any loans greater than 90 days past due must be well secured and in the process of collection to continue accruing interest.  See Note 1 to the condensed consolidated financial statements for further discussion on our nonaccrual policy.

The following tables present CTBI’s loan portfolio aging analysis, segregated by class, as of June 30, 2023 and December 31, 2022 (includes loans 90 days past due and still accruing as well):

	June 30, 2023
(in thousands)	30-59 Days Past Due		60-89 Days Past Due		90+ Days Past Due		Total Past Due		Current		Total Loans
Hotel/motel	$	0	$	0	$	0	$	0	$	372,981	$	372,981
Commercial real estate residential		152		279		1,000		1,431		391,878		393,309
Commercial real estate nonresidential		1,101		110		940		2,151		785,447		787,598
Dealer floorplans		0		0		0		0		76,903		76,903
Commercial other		1,062		330		694		2,086		317,752		319,838
Total commercial loans		2,315		719		2,634		5,668		1,944,961		1,950,629
Real estate mortgage		1,440		2,528		6,220		10,188		872,916		883,104
Home equity lines		733		435		490		1,658		130,375		132,033
Total residential loans		2,173		2,963		6,710		11,846		1,003,291		1,015,137
Consumer direct		557		95		6		658		157,190		157,848
Consumer indirect		3,147		865		439		4,451		801,630		806,081
Total consumer loans		3,704		960		445		5,109		958,820		963,929
Loans and lease financing	$	8,192	$	4,642	$	9,789	$	22,623	$	3,907,072	$	3,929,695

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	December 31, 2022
(in thousands)	30-59 Days Past Due		60-89 Days Past Due		90+ Days Past Due		Total Past Due		Current		Total Loans
Hotel/motel	$	0	$	0	$	0	$	0	$	343,640	$	343,640
Commercial real estate residential		602		225		574		1,401		371,513		372,914
Commercial real estate nonresidential		2,549		395		2,611		5,555		756,794		762,349
Dealer floorplans		0		0		0		0		77,533		77,533
Commercial other		1,029		850		496		2,375		310,047		312,422
Total commercial loans		4,180		1,470		3,681		9,331		1,859,527		1,868,858
Real estate mortgage		869		3,402		7,067		11,338		813,658		824,996
Home equity lines		786		44		740		1,570		118,970		120,540
Total residential loans		1,655		3,446		7,807		12,908		932,628		945,536
Consumer direct		555		126		41		722		156,782		157,504
Consumer indirect		4,407		764		465		5,636		731,756		737,392
Total consumer loans		4,962		890		506		6,358		888,538		894,896
Loans and lease financing	$	10,797	$	5,806	$	11,994	$	28,597	$	3,680,693	$	3,709,290

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

Hotel/motel loans are a significant concentration for CTBI, representing approximately 9.5% of total loans.  This industry has unique risk characteristics as it is highly susceptible to changes in the domestic and global economic environments, which can cause the industry to experience substantial volatility.  These loans are viewed primarily as cash flow loans and secondarily as loans secured by real estate.  Hotel/motel 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.  Management monitors and evaluates all commercial real estate loans based on collateral and risk grade criteria.  Commercial construction loans generally are made to customers for the purpose of building income-producing properties, and any hotel/motel construction loan would be included in this segment.  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.

Commercial real estate residential loans are commercial purpose construction and permanent financed loans for commercial purpose 1-4 family/multi-family properties.  All commercial real estate loans are viewed primarily as cash flow loans and secondarily as loans secured by real estate.  Management monitors and evaluates all commercial real estate loans based on collateral and risk grade criteria.  Commercial residential 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.

24

Commercial real estate nonresidential loans are secured by nonfarm, nonresidential properties, farmland, and other commercial real estate.  Construction for commercial real estate nonresidential loans are also included in this segment as these loans are generally one loan for construction to permanent financing.  All commercial real estate loans are viewed primarily as cash flow loans and secondarily as loans secured by real estate.  Management monitors and evaluates all commercial real estate loans based on collateral and risk grade criteria.  Commercial nonresidential 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.

Dealer floorplans are segmented separately as they are a unique product with unique risk factors. CTBI maintains strict processing procedures over our floorplan product with any exceptions requested by a loan officer approved by the appropriate loan committee and the floorplan manager.

Commercial other 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 our customers.  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.

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 is generally responsible for purchasing/funding consumer contracts with new and used automobile dealers.  Dealer loan applications 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 borrowers, and on the collateral value.  The dealers may have limited recourse agreements with CTB.

25

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.

26

The following tables present the credit risk profile of CTBI’s commercial loan portfolio based on rating category and payment activity, as well as gross charge-offs year to date, if any, segregated by class of loans and based on last credit decision or year of origination:

June 30, 2023	Term Loans Amortized Cost Basis by Origination Year
(in thousands)	2023			2022			2021			2020			2019			Prior			Revolving Loans		Total
Hotel/motel
Risk rating:
Pass	$	38,210		$	150,521		$	28,454		$	17,968		$	47,039		$	47,091		$	4,043	$	333,326
Watch		2,949			6,957			8,873			4,709			3,412			3,871			0		30,771
OAEM		0			0			6,971			0			0			1,913			0		8,884
Substandard		0			0			0			0			0			0			0		0
Doubtful		0			0			0			0			0			0			0		0
Total hotel/motel		41,159			157,478			44,298			22,677			50,451			52,875			4,043		372,981
Commercial real estate residential
Risk rating:
Pass		55,238			104,912			104,205			35,701			12,921			41,206			14,132		368,315
Watch		753			1,010			835			1,948			743			7,367			144		12,800
OAEM		0			0			0			0			0			65			0		65
Substandard		286			617			4,295			623			289			6,019			0		12,129
Doubtful		0			0			0			0			0			0			0		0
Total commercial real estate residential		56,277			106,539			109,335			38,272			13,953			54,657			14,276		393,309
Commercial real estate residential current period gross charge-offs		0			0			(28	)		0			0			0			0		(28	)
Commercial real estate nonresidential
Risk rating:
Pass		81,927			153,561			152,539			79,949			66,557			166,883			25,508		726,924
Watch		300			3,966			6,499			9,716			7,618			6,710			711		35,520
OAEM		2,375			19			0			0			0			74			0		2,468
Substandard		1,370			1,439			2,522			4,543			3,096			9,701			0		22,671
Doubtful		0			0			0			0			0			15			0		15
Total commercial real estate nonresidential		85,972			158,985			161,560			94,208			77,271			183,383			26,219		787,598
Commercial real estate nonresidential current period gross charge-offs		0			0			0			(9	)		0			0			0		(9	)
Dealer floorplans
Risk rating:
Pass		0			0			0			0			0			0			76,903		76,903
Watch		0			0			0			0			0			0			0		0
OAEM		0			0			0			0			0			0			0		0
Substandard		0			0			0			0			0			0			0		0
Doubtful		0			0			0			0			0			0			0		0
Total dealer floorplans		0			0			0			0			0			0			76,903		76,903
Commercial other
Risk rating:
Pass		41,105			60,219			54,817			31,984			6,523			24,483			78,670		297,801
Watch		541			1,390			980			156			334			771			5,990		10,162
OAEM		0			30			0			0			0			0			30		60
Substandard		466			4,216			4,807			943			219			564			600		11,815
Doubtful		0			0			0			0			0			0			0		0
Total commercial other		42,112			65,855			60,604			33,083			7,076			25,818			85,290		319,838
Commercial other current period gross charge-offs		(321	)		(632	)		(154	)		(17	)		(90	)		(46	)		0		(1,260	)
Commercial loans
Risk rating:
Pass		216,480			469,213			340,015			165,602			133,040			279,663			199,256		1,803,269
Watch		4,543			13,323			17,187			16,529			12,107			18,719			6,845		89,253
OAEM		2,375			49			6,971			0			0			2,052			30		11,477
Substandard		2,122			6,272			11,624			6,109			3,604			16,284			600		46,615
Doubtful		0			0			0			0			0			15			0		15
Total commercial loans	$	225,520		$	488,857		$	375,797		$	188,240		$	148,751		$	316,733		$	206,731	$	1,950,629
Total commercial loans current period gross charge-offs	$	(321	)	$	(632	)	$	(182	)	$	(26	)	$	(90	)	$	(46	)	$	0	$	(1,297	)

27

December 31, 2022	Term Loans Amortized Cost Basis by Origination Year
(in thousands)	2022		2021		2020		2019		2018		Prior		Revolving Loans		Total
Hotel/motel
Risk rating:
Pass	$	145,262	$	36,002	$	17,742	$	54,328	$	13,178	$	35,179	$	545	$	302,236
Watch		7,921		8,996		5,523		3,453		0		13,555		0		39,448
OAEM		0		0		0		0		0		1,956		0		1,956
Substandard		0		0		0		0		0		0		0		0
Doubtful		0		0		0		0		0		0		0		0
Total hotel/motel		153,183		44,998		23,265		57,781		13,178		50,690		545		343,640
Commercial real estate residential
Risk rating:
Pass		119,826		110,963		38,423		15,467		10,492		36,307		14,297		345,775
Watch		1,474		898		1,675		848		2,136		7,015		152		14,198
OAEM		0		0		0		39		0		0		29		68
Substandard		182		4,289		1,878		346		3,639		2,539		0		12,873
Doubtful		0		0		0		0		0		0		0		0
Total commercial real estate residential		121,482		116,150		41,976		16,700		16,267		45,861		14,478		372,914
Commercial real estate nonresidential
Risk rating:
Pass		175,220		171,311		80,932		70,848		44,099		137,575		23,166		703,151
Watch		3,331		5,765		10,090		2,178		1,962		10,022		1,550		34,898
OAEM		19		0		0		0		0		90		0		109
Substandard		1,939		2,537		4,877		3,135		508		10,865		25		23,886
Doubtful		0		0		0		0		0		305		0		305
Total commercial real estate nonresidential		180,509		179,613		95,899		76,161		46,569		158,857		24,741		762,349
Dealer floorplans
Risk rating:
Pass		0		0		0		0		0		0		77,153		77,153
Watch		0		0		0		0		0		0		380		380
OAEM		0		0		0		0		0		0		0		0
Substandard		0		0		0		0		0		0		0		0
Doubtful		0		0		0		0		0		0		0		0
Total dealer floorplans		0		0		0		0		0		0		77,533		77,533
Commercial other
Risk rating:
Pass		78,846		60,550		34,841		8,922		2,333		23,961		77,355		286,808
Watch		1,622		393		604		217		159		780		6,402		10,177
OAEM		30		0		0		0		0		0		30		60
Substandard		6,090		5,489		885		356		143		758		952		14,673
Doubtful		466		129		0		109		0		0		0		704
Total commercial other		87,054		66,561		36,330		9,604		2,635		25,499		84,739		312,422
Commercial loans
Risk rating:
Pass		519,154		378,826		171,938		149,565		70,102		233,022		192,516		1,715,123
Watch		14,348		16,052		17,892		6,696		4,257		31,372		8,484		99,101
OAEM		49		0		0		39		0		2,046		59		2,193
Substandard		8,211		12,315		7,640		3,837		4,290		14,162		977		51,432
Doubtful		466		129		0		109		0		305		0		1,009
Total commercial loans	$	542,228	$	407,322	$	197,470	$	160,246	$	78,649	$	280,907	$	202,036	$	1,868,858

28

The following tables present the credit risk profile of CTBI’s residential real estate and consumer loan portfolios based on performing or nonperforming status, segregated by class:

June 30, 2023	Term Loans Amortized Cost Basis by Origination Year
(in thousands)	2023			2022			2021			2020			2019			Prior			Revolving Loans		Total
Home equity lines
Performing	$	0		$	0		$	0		$	0		$	0		$	9,047		$	122,332	$	131,379
Nonperforming		0			0			0			0			0			403			251		654
Total home equity lines		0			0			0			0			0			9,450			122,583		132,033
Home equity lines current period gross charge-offs																	(13	)		0		(13	)
Mortgage loans
Performing		96,372			175,566			169,481			125,782			59,375			249,229			0		875,805
Nonperforming		0			0			311			121			773			6,094			0		7,299
Total mortgage loans		96,372			175,566			169,792			125,903			60,148			255,323			0		883,104
Mortgage loans current period gross charge-offs		0			0			(47	)		0			(1	)		(47	)		0		(95	)
Residential loans
Performing		96,372			175,566			169,481			125,782			59,375			258,276			122,332		1,007,184
Nonperforming		0			0			311			121			773			6,497			251		7,953
Total residential loans	$	96,372		$	175,566		$	169,792		$	125,903		$	60,148		$	264,773		$	122,583	$	1,015,137
Total residential loans current period gross charge-offs	$	0		$	0		$	(47	)	$	0		$	(1	)	$	(60	)	$	0	$	(108	)
Consumer direct loans
Performing	$	35,168		$	45,893		$	33,307		$	19,215		$	9,082		$	15,177		$	0	$	157,842
Nonperforming		0			6			0			0			0			0			0		6
Total consumer direct loans		35,168			45,899			33,307			19,215			9,082			15,177			0		157,848
Total consumer direct loans current period gross charge-offs		0			(146	)		(42	)		(30	)		(14	)		(6	)		0		(238	)
Consumer indirect loans
Performing		217,355			306,664			136,812			90,812			33,856			20,143			0		805,642
Nonperforming		0			157			183			36			18			45			0		439
Total consumer indirect loans		217,355			306,821			136,995			90,848			33,874			20,188			0		806,081
Total consumer indirect loans current period gross charge-offs		(42	)		(785	)		(883	)		(217	)		(75	)		(73	)		0		(2,075	)
Consumer loans
Performing		252,523			352,557			170,119			110,027			42,938			35,320			0		963,484
Nonperforming		0			163			183			36			18			45			0		445
Total consumer loans	$	252,523		$	352,720		$	170,302		$	110,063		$	42,956		$	35,365		$	0	$	963,929
Total consumer loans current period gross charge-offs	$	(42	)	$	(931	)	$	(925	)	$	(247	)	$	(89	)	$	(79	)	$	0	$	(2,313	)

29

December 31, 2022	Term Loans Amortized Cost Basis by Origination Year
(in thousands)	2022		2021		2020		2019		2018		Prior		Revolving Loans		Total
Home equity lines
Performing	$	0	$	0	$	0	$	0	$	0	$	10,195	$	109,567	$	119,762
Nonperforming		0		0		0		0		0		502		276		778
Total home equity lines		0		0		0		0		0		10,697		109,843		120,540
Mortgage loans
Performing		176,736		177,469		132,795		62,415		30,473		236,110		0		815,998
Nonperforming		0		282		98		791		422		7,405		0		8,998
Total mortgage loans		176,736		177,751		132,893		63,206		30,895		243,515		0		824,996
Residential loans
Performing		176,736		177,469		132,795		62,415		30,473		246,305		109,567		935,760
Nonperforming		0		282		98		791		422		7,907		276		9,776
Total residential loans	$	176,736	$	177,751	$	132,893	$	63,206	$	30,895	$	254,212	$	109,843	$	945,536
Consumer direct loans
Performing	$	62,239	$	42,014	$	23,921	$	11,166	$	6,766	$	11,357	$	0	$	157,463
Nonperforming		25		11		5		0		0		0		0		41
Total consumer direct loans		62,264		42,025		23,926		11,166		6,766		11,357		0		157,504
Consumer indirect loans
Performing		371,079		168,513		116,267		45,748		26,247		9,073		0		736,927
Nonperforming		65		251		96		30		1		22		0		465
Total consumer indirect loans		371,144		168,764		116,363		45,778		26,248		9,095		0		737,392
Consumer loans
Performing		433,318		210,527		140,188		56,914		33,013		20,430		0		894,390
Nonperforming		90		262		101		30		1		22		0		506
Total consumer loans	$	433,408	$	210,789	$	140,289	$	56,944	$	33,014	$	20,452	$	0	$	894,896

* 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 was $3.8 million at June 30, 2023.  The total of consumer mortgage loans secured by real estate properties for which formal foreclosure proceedings have resumed with restricted parameters was $3.3  million at December 31, 2022.

30

In accordance with ASC 326-20-30-2, if a loan does not share risk characteristics with other pooled loans in determining the allowance for credit losses, the loan shall be evaluated for expected credit losses on an individual basis. Of the loans that CTBI has individually evaluated, the loans listed below by segment are those that are collateral dependent:

	June 30, 2023
(in thousands)	Number of Loans		Recorded Investment		Specific Reserve
Hotel/motel		2	$	8,114	$	0
Commercial real estate residential		3		6,353		0
Commercial real estate nonresidential		6		11,704		0
Commercial other		2		6,585		0
Total collateral dependent loans		13	$	32,756	$	0

	December 31, 2022
(in thousands)	Number of Loans		Recorded Investment		Specific Reserve
Hotel/motel		1	$	1,168	$	0
Commercial real estate residential		4		7,786		0
Commercial real estate nonresidential		8		14,718		200
Commercial other		2		8,926		1,000
Total collateral dependent loans		15	$	32,598	$	1,200

	June 30, 2022
(in thousands)	Number of Loans		Recorded Investment		Specific Reserve
Hotel/motel		1	$	1,196	$	0
Commercial real estate residential		4		6,957		0
Commercial real estate nonresidential		10		18,218		200
Commercial other		3		10,190		550
Total collateral dependent loans		18	$	36,561	$	750

The hotel/motel, commercial real estate residential, and commercial real estate nonresidential segments are all collateralized with real estate. The two loans listed in the commercial other segment at June 30, 2023 are collateralized by inventory, equipment, and accounts receivable.

31

Certain loans have been modified where the customer is facing financial difficulty and economic concessions were granted to borrowers consisting of reductions in the interest rates, payment extensions, forgiveness of principal, and forbearances.  Those loans, segregated by class of loans and concession granted, are presented below for the three months ended June 30, 2023:

	Interest Rate Reduction					Term Extension
(in thousands)	Amortized Cost at June 30, 2023		% of total			Amortized Cost at June 30, 2023		% of total
Hotel/motel	$	0		0.00	%	$	0		0.00	%
Commercial real estate residential		0		0.00			44		0.01
Commercial real estate nonresidential		73		0.01			13		0.00
Dealer floorplans		0		0.00			0		0.00
Commercial other		0		0.00			522		0.16
Commercial loans		73		0.00			579		0.03
Real estate mortgage		0		0.00			877		0.10
Home equity lines		0		0.00			0		0.00
Residential loans		0		0.00			877		0.09
Consumer direct		0		0.00			54		0.03
Consumer indirect		0		0.00			95		0.01
Consumer loans		0		0.00			149		0.02
Loans and lease financing	$	73		0.00	%	$	1,605		0.04	%

	Combination – Term Extension and Interest Rate Reduction					Payment Change
(in thousands)	Amortized Cost at June 30, 2023		% of total			Amortized Cost at June 30, 2023		% of total
Hotel/motel	$	0		0.00	%	$	0		0.00	%
Commercial real estate residential		0		0.00			0		0.00
Commercial real estate nonresidential		0		0.00			0		0.00
Dealer floorplans		0		0.00			0		0.00
Commercial other		0		0.00			300		0.09
Commercial loans		0		0.00			300		0.02
Real estate mortgage		209		0.02			0		0.00
Home equity lines		43		0.03			116		0.09
Residential loans		252		0.02			116		0.01
Consumer direct		0		0.00			0		0.00
Consumer indirect		0		0.00			0		0.00
Consumer loans		0		0.00			0		0.00
Loans and lease financing	$	252		0.01	%	$	416		0.01	%

32

The following table describes the financial effect of the modifications made to borrowers experiencing financial difficulty for the three months ended June 30, 2023:

Loan Type	Interest Rate Reduction Financial Impact	Term Extension Financial Impact
Hotel/motel
Commercial real estate residential		Added a weighted-average 11.7 years to life of the loans
Commercial real estate nonresidential	Reduced weighted-average contractual interest rate from 10.8% to 8.5%
Dealer floorplans
Commercial other		Added a weighted-average 0.8 years to life of the loans
Real estate mortgage		Added a weighted-average 4 years to life of the loans
Home equity lines
Consumer direct		Added a weighted-average 0.2 years to the life of the loans
Consumer indirect		Added a weighted-average 0.5 years to the life of the loans

Loan Type	Combination – Term Extension and  Interest Rate Reduction Financial Impact	Payment Changes Financial Impact
Hotel/motel
Commercial real estate residential
Commercial real estate nonresidential
Dealer floorplans
Commercial other		Provided payment changes that will be added to the end of the original loan term
Real estate mortgage	Reduced weighted-average contractual interest rate from 6.8% to 6.2% and increased the weighted-average life by 9.7 years
Home equity lines	Reduced weighted-average contractual interest rate from 10.3% to 8.3% and increased the weighted-average life by 14.3 years	Provided payment changes that will be added to the end of the original loan term
Consumer direct
Consumer indirect

33

Those loans, segregated by class of loans and concession granted, are presented below for the six months ended June 30, 2023:

	Interest Rate Reduction					Term Extension
(in thousands)	Amortized Cost at June 30, 2023		% of total			Amortized Cost at June 30, 2023		% of total
Hotel/motel	$	0		0.00	%	$	0		0.00	%
Commercial real estate residential		311		0.08			1,383		0.35
Commercial real estate nonresidential		4,573		0.58			4,800		0.61
Dealer floorplans		0		0.00			0		0.00
Commercial other		0		0.00			1,474		0.46
Commercial loans		4,884		0.25			7,657		0.39
Real estate mortgage		58		0.01			3,317		0.38
Home equity lines		0		0.00			54		0.04
Residential loans		58		0.01			3,371		0.33
Consumer direct		0		0.00			224		0.14
Consumer indirect		0		0.00			450		0.06
Consumer loans		0		0.00			674		0.07
Loans and lease financing	$	4,942		0.13	%	$	11,702		0.30	%

	Combination – Term Extension and Interest Rate Reduction					Payment Change
(in thousands)	Amortized Cost at June 30, 2023		% of total			Amortized Cost at June 30, 2023		% of total
Hotel/motel	$	0		0.00	%	$	0		0.00	%
Commercial real estate residential		88		0.02			0		0.00
Commercial real estate nonresidential		0		0.00			0		0.00
Dealer floorplans		0		0.00			0		0.00
Commercial other		0		0.00			300		0.09
Commercial loans		88		0.00			300		0.02
Real estate mortgage		427		0.05			0		0.00
Home equity lines		77		0.06			116		0.09
Residential loans		504		0.05			116		0.01
Consumer direct		0		0.00			20		0.01
Consumer indirect		0		0.00			0		0.00
Consumer loans		0		0.00			20		0.00
Loans and lease financing	$	592		0.02	%	$	436		0.01	%

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The following table describes the financial effect of the modifications made to borrowers experiencing financial difficulty for the six months ended June 30, 2023:

Loan Type	Interest Rate Reduction Financial Impact	Term Extension Financial Impact
Hotel/motel
Commercial real estate residential	Reduced weighted-average contractual interest rate from 9.6% to 8.0%	The weighted-average term was not increased with the changes to this portfolio
Commercial real estate nonresidential	Reduced weighted-average contractual interest rate from 9.5% to 7.5%	The weighted-average term was not increased with the changes to this portfolio
Dealer floorplans
Commercial other		Added a weighted-average 1.4 years to life of the loans
Real estate mortgage	Resulted in no change of the weighted average contractual interest rate of 3.0%	Added a weighted-average 2.8 years to life of the loans
Home equity lines		Added a weighted-average 6.8 years to life of the loans
Consumer direct		Removed a weighted-average 0.6 years from the life of the loans
Consumer indirect		Added a weighted-average 0.3 years to the life of the loans

Loan Type	Combination – Term Extension and Interest Rate Reduction Financial Impact	Payment Changes Financial Impact
Hotel/motel
Commercial real estate residential	Reduced weighted-average contractual interest rate from 10.4% to 7.2% and increased the weighted-average life by 5.9 years
Commercial real estate nonresidential
Dealer floorplans
Commercial other		Provided payment changes that will be added to the end of the original loan term
Real estate mortgage	Reduced weighted-average contractual interest rate from 7.1% to 6.1% and increased the weighted-average life by 11.3 years
Home equity lines	Reduced weighted-average contractual interest rate from 9.1% to 8.0% and increased the weighted-average life by 10.2 years	Provided payment changes that will be added to the end of the original loan term
Consumer direct		Provided payment changes that will be added to the end of the original loan term
Consumer indirect

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 Presented  below, segregated by class of loans, are TDRs that occurred during the three and six months ended June 30, 2022 and the year ended December 31, 2022:

	Three Months Ended June 30, 2022
	Pre-Modification Outstanding Balance
(in thousands)	Number of Loans		Term Modification		Combination		Total Modification
Hotel/motel		0	$	0	$	0	$	0
Commercial real estate residential		0		0		0		0
Commercial real estate nonresidential		0		0		0		0
Commercial other		5		5,562		0		5,562
Total commercial loans		5		5,562		0		5,562
Real estate mortgage		1		305		0		305
Total residential loans		1		305		0		305
Total troubled debt restructurings		6	$	5,867	$	0	$	5,867

	Three Months Ended June 30, 2022
	Post-Modification Outstanding Balance
(in thousands)	Number of Loans		Term Modification		Combination		Total Modification
Hotel/motel		0	$	0	$	0	$	0
Commercial real estate residential		0		0		0		0
Commercial real estate nonresidential		0		0		0		0
Commercial other		5		5,562		0		5,562
Total commercial loans		5		5,562		0		5,562
Real estate mortgage		1		305		0		305
Total residential loans		1		305		0		305
Total troubled debt restructurings		6	$	5,867	$	0	$	5,867

	Six Months Ended June 30, 2022
	Pre-Modification Outstanding Balance
(in thousands)	Number of Loans		Term Modification		Combination		Total Modification
Hotel/motel		0	$	0	$	0	$	0
Commercial real estate residential		2		154		0		154
Commercial real estate nonresidential		2		245		0		245
Commercial other		9		6,526		0		6,526
Total commercial loans		13		6,925		0		6,925
Real estate mortgage		3		305		916		1,221
Total residential loans		3		305		916		1,221
Total troubled debt restructurings		16	$	7,230	$	916	$	8,146

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	Six Months Ended June 30, 2022
	Post-Modification Outstanding Balance
(in thousands)	Number of Loans		Term Modification		Combination		Total Modification
Hotel/motel		0	$	0	$	0	$	0
Commercial real estate residential		2		154		0		154
Commercial real estate nonresidential		2		244		0		244
Commercial other		9		6,525		0		6,525
Total commercial loans		13		6,923		0		6,923
Real estate mortgage		3		305		916		1,221
Total residential loans		3		305		916		1,221
Total troubled debt restructurings		16	$	7,228	$	916	$	8,144

	Year Ended December 31, 2022
	Pre-Modification Outstanding Balance
(in thousands)	Number of Loans		Term Modification		Combination		Other		Total Modification
Commercial real estate residential		6	$	659	$	0	$	66	$	725
Commercial real estate nonresidential		8		1,206		0		118		1,324
Hotel/motel		0		0		0		0		0
Commercial other		22		12,812		0		66		12,878
Total commercial loans		36		14,677		0		250		14,927
Real estate mortgage		5		593		1,309		0		1,902
Total residential loans		5		593		1,309		0		1,902
Total troubled debt restructurings		41	$	15,270	$	1,309	$	250	$	16,829

	Year Ended December 31, 2022
	Post-Modification Outstanding Balance
(in thousands)	Number of Loans		Term Modification		Combination		Other		Total Modification
Commercial real estate residential		6	$	659	$	0	$	66	$	725
Commercial real estate nonresidential		8		1,342		0		118		1,460
Hotel/motel		0		0		0		0		0
Commercial other		22		12,811		0		66		12,877
Total commercial loans		36		14,812		0		250		15,062
Real estate mortgage		5		593		1,309		0		1,902
Total residential loans		5		593		1,309		0		1,902
Total troubled debt restructurings		41	$	15,405	$	1,309	$	250	$	16,964

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Loans retain their accrual status at the time of their modification.  As a result, if a loan is on nonaccrual at the time it is modified, it stays as nonaccrual, and if a loan is on accrual at the time of the modification, it generally stays on accrual.  Commercial and consumer loans modified due to a borrower’s financial difficulty are closely monitored for delinquency as an early indicator of possible future default.  If a loan to a borrower experiencing financial difficulty subsequently defaults, CTBI evaluates the loan for possible further impairment. The table below represents the payment status of modified loans to borrowers experiencing financial difficulty.

	Past Due Status (Amortized Cost Basis)
	Current			30-89 Days		90+ Days	Nonaccrual
Hotel/motel	$	0	$	0	$	0	$	0
Commercial real estate residential		1,741		40		0		0
Commercial real estate nonresidential		9,373		0		0		0
Dealer floorplans		0		0		0		0
Commercial other		1,145		292		0		337
Real estate mortgage		3,374		125		118		185
Home equity lines		168		59		0		22
Consumer direct		239		5		0		0
Consumer indirect		371		78		0		0
Total	$	16,411	$	599	$	118	$	544

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.  During the quarter ended June 30, 2023, there were three loans to borrowers experiencing financial difficulty that subsequently defaulted.  CTBI considers a loan in default when it is 90 days or more past due or transferred to nonaccrual.

There were no troubled debt restructured loans for the three and six months ended June 30, 2023.

Financial instrument credit losses apply to off-balance sheet credit exposures such as unfunded loan commitments and standby letters of credit.  A liability for expected credit losses for off-balance sheet exposures is recognized if the entity has a present contractual obligation to extend the credit and the obligation is not unconditionally cancellable by the entity.  Changes in this allowance are reflected in other operating expenses within the non-interest expense category.  As of June 30, 2023 and December 31, 2022, the total unfunded commitment off-balance sheet credit exposure was $1.1 million and $0.7 million, respectively.

Note 5 – 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)	2023			2022			2023			2022
Beginning balance of other real estate owned	$	2,776		$	2,299		$	3,671		$	3,486
New assets acquired		124			307			175			444
Capitalized costs		40			73			40			73
Fair value adjustments		(25	)		(23	)		(106	)		(269	)
Sale of assets		(868	)		(702	)		(1,733	)		(1,780	)
Ending balance of other real estate owned	$	2,047		$	1,954		$	2,047		$	1,954

Carrying costs and fair value adjustments associated with foreclosed properties for the three months ended June 30, 2023 and 2022 were $0.1 million in each period. Carrying costs and fair value adjustments associated with foreclosed properties for the six months ended June 30, 2023 and 2022 were $0.2 million and $0.4 million, respectively. See Note 1 for a description of our accounting policies relative to foreclosed properties and other real estate owned.

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

(in thousands)	June 30 2023		December 31 2022
1-4 family	$	574	$	859
Construction/land development/other		683		867
Non-farm/non-residential		790		1,945
Total foreclosed properties	$	2,047	$	3,671

Note 6 – 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 $300.3 million and $273.8 million at June 30, 2023 and December 31, 2022, 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, 2023 and December 31, 2022 is presented in the following tables:

	June 30, 2023
	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	$	19,951	$	2,000	$	0	$	22,608	$	44,559
State and political subdivisions		99,257		1,391		0		7,898		108,546
U.S. government sponsored agency mortgage-backed securities		23,552		7,609		0		43,633		74,794
Asset-backed securities		1,121		0		0		0		1,121
Total	$	143,881	$	11,000	$	0	$	74,139	$	229,020

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	December 31, 2022
	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	$	21,679	$	34	$	2,979	$	1,832	$	26,524
State and political subdivisions		96,627		466		9,634		2,140		108,867
U.S. government sponsored agency mortgage-backed securities		17,964		0		52,387		9,385		79,736
Asset-backed securities		304		0		0		0		304
Total	$	136,574	$	500	$	65,000	$	13,357	$	215,431

Note 7 – Fair 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 GAAP, 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 exit price 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 determining an exit price for the assets or liabilities.

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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, 2023 and December 31, 2022 and indicate the level within the fair value hierarchy of the valuation techniques.

			Fair Value Measurements at June 30, 2023 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	$	365,394	$	341,199	$	24,195	$	0
State and political subdivisions		259,825		0		259,825		0
U.S. government sponsored agency mortgage-backed securities		487,899		0		487,899		0
Asset-backed securities		88,135		0		88,135		0
Equity securities at fair value		2,545		0		0		2,545
Mortgage servicing rights		8,230		0		0		8,230

			Fair Value Measurements at December 31, 2022 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	$	381,932	$	346,265	$	35,667	$	0
State and political subdivisions		265,102		0		265,102		0
U.S. government sponsored agency mortgage-backed securities		520,085		0		520,085		0
Asset-backed securities		89,107		0		89,107		0
Equity securities at fair value		2,166		0		0		2,166
Mortgage servicing rights		8,468		0		0		8,468

Following is a description of the valuation methodologies and inputs used for assets measured at fair value on a recurring basis and recognized in the accompanying balance sheets, as well as the general classification of such assets pursuant to the valuation hierarchy. These valuation methodologies were applied to all of CTBI’s financial assets carried at fair value. CTBI had no liabilities measured and recorded at fair value as of June 30, 2023 and December 31, 2022. There have been no significant changes in the valuation techniques during the quarter ended June 30, 2023. 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 AFS are reported at fair value on a recurring basis. U.S. Treasury and government agencies 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.

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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, U.S. government sponsored agency mortgage-backed securities, and asset-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.

Equity Securities at Fair Value

As of June 30, 2023 and December 31, 2022, the only securities owned by CTBI that were valued using Level 3 criteria are Visa Class B Stock (included in equity securities at fair value). Fair value for Visa Class B Stock is determined by an independent third party utilizing assumptions about factors such as quarterly common stock dividend payments, the conversion of the securities to the relevant Class A Stock shares subject to the prevailing conversion rate, and conversion date. We have concluded the third party assumptions, processes, and conclusions to be reasonable and appropriate in determining the fair value of this asset. See the table below for inputs and valuation techniques used for Level 3 equity securities.

Mortgage Servicing Rights

Mortgage servicing rights (“MSRs”) do not trade in an active, open market with readily observable prices. CTBI reports MSRs 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, MSRs are classified within Level 3 of the hierarchy. Fair value determinations for Level 3 measurements of MSRs 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. We have reviewed the assumptions, processes, and conclusions of the third party provider. We have determined these assumptions, processes, and conclusions to be reasonable and appropriate in determining the fair value of this asset. See the table below for inputs and valuation techniques used for Level 3 MSRs.

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Level 3 Reconciliation

Following is a reconciliation of the beginning and ending balances of recurring fair value measurements, for the periods indicated, using significant unobservable (Level 3) inputs:

	Three Months Ended June 30, 2023					Three Months Ended June 30, 2022
(in thousands)	Equity Securities at Fair Value		Mortgage Servicing Rights			Equity Securities at Fair Value			Mortgage Servicing Rights
Beginning balance	$	2,380	$	8,121		$	2,352		$	7,748
Total unrealized gains (losses)
Included in net income		165		80			(224	)		468
Issues		0		46			0			223
Settlements		0		(17	)		0			(219	)
Ending balance	$	2,545	$	8,230		$	2,128		$	8,220
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	$	165	$	80		$	(224	)	$	468

	Six Months Ended June 30, 2023					Six Months Ended June 30, 2022
(in thousands)	Equity Securities at Fair Value		Mortgage Servicing Rights			Equity Securities at Fair Value			Mortgage Servicing Rights
Beginning balance	$	2,166	$	8,468		$	2,253		$	6,774
Total unrealized gains (losses)
Included in net income		379		(134	)		(125	)		1,451
Issues		0		96			0			452
Settlements		0		(200	)		0			(457	)
Ending balance	$	2,545	$	8,230		$	2,128		$	8,220
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	$	379	$	(134	)	$	(125	)	$	1,451

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				Six Months Ended
	June 30				June 30
(in thousands)	2023		2022		2023		2022
Total gains	$	227	$	25	$	44	$	869

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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, 2023 and December 31, 2022 and indicate the level within the fair value hierarchy of the valuation techniques.

			Fair Value Measurements at June 30, 2023 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
Other real estate owned	$	177	$	0	$	0	$	177

			Fair Value Measurements at December 31, 2022 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	$	2,703	$	0	$	0	$	2,703
Other real estate owned		570		0		0		570

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.

Collateral Dependent Loans

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

CTBI considers the appraisal or evaluation as the starting point for determining fair value and then considers other factors and events in the environment that may affect the fair value. Appraisals of the collateral underlying collateral-dependent loans are obtained when the loan is determined to be collateral-dependent and subsequently as deemed necessary by the Chief Credit Officer. 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 collateral dependent are loans for which the repayment is expected to be provided substantially through the operation or sale of the collateral when the borrower is experiencing financial difficulty in accordance with ASC 326-20-35-5.  There were no collateral dependent loans as of June 30, 2023.

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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.  Fair value adjustments on OREO disclosed above were $25 thousand for the quarter ended June 30, 2023, $106 thousand for the six months ended June 30, 2023, and $285 thousand for the year ended December 31, 2022.

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, 2023 and December 31, 2022.

	Quantitative Information about Level 3 Fair Value Measurements
(in thousands)	Fair Value at June 30, 2023		Valuation Technique(s)	Unobservable Input	Range (Weighted Average)
Equity securities at fair value	$	2,545	Discount cash flows, computer pricing model	Discount rate	8.0% - 12.0% (10.0%)
				Conversion date	Dec 2025 - Dec 2029 (Dec 2027)
Mortgage servicing rights	$	8,230	Discount cash flows, computer pricing model	Constant prepayment rate	0.0% - 26.7% (7.4%)
				Probability of default	0.0% - 100% (1.3%)
				Discount rate	9.5% - 11.5% (10.0%)
Other real estate owned	$	177	Market comparable properties	Comparability adjustments	0.0% - 10.0% (10.0%)

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	Quantitative Information about Level 3 Fair Value Measurements
(in thousands)	Fair Value at December 31, 2022		Valuation Technique(s)	Unobservable Input	Range (Weighted Average)
Equity securities at fair value	$	2,166	Discount cash flows, computer pricing model	Discount rate	8.0% - 12.0% (10.0%)
				Conversion date	Dec 2025 - Dec 2029 (Dec 2027)
Mortgage servicing rights	$	8,468	Discount cash flows, computer pricing model	Constant prepayment rate	6.5% - 28.0% (7.1%)
				Probability of default	0.0% - 100.0% (1.2%)
				Discount rate	9.5% - 12.0% (10.0%)
Collateral-dependent loans	$	2,703	Market comparable properties	Marketability discount	52.0% - 52.0% (52.0%)
Other real estate owned	$	570	Market comparable properties	Comparability adjustments	10.0% - 30.6% (10.9%)

Uncertainty of Fair Value Measurements

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

Equity Securities at Fair Value

Fair value for equity securities is derived based on unobservable inputs, such as the discount rate, quarterly dividends payable to the Visa Class B common stock, and the prevailing conversion rate at the conversion date. The most recent conversion rate of 1.5902 and the most recent dividend rate of 0.7156 were used to derive the fair value estimate. Significant increases (decreases) in either of those inputs in isolation would result in a significantly lower (higher) fair value measurement. Generally, a change in the assumption used for discount rate is accompanied by a directionally opposite change in the fair value estimate.

Mortgage Servicing Rights

Fair value for MSRs is derived based on unobservable inputs, such as prepayment speeds of the underlying loans generated using the Andrew Davidson Prepayment Model, FHLMC/FNMA guidelines, the weighted average life of the loan, the discount rate, the weighted average coupon, and the weighted average default rate. Significant increases (decreases) in either of those inputs in isolation would result in a significantly lower (higher) fair value measurement. Generally, a change in the assumption used for prepayment speeds is accompanied by a directionally opposite change in the assumption for interest rates.

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Fair Value of Financial Instruments

The following table presents estimated fair value of CTBI’s financial instruments as of June 30, 2023 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 June 30, 2023 were measured using an exit price notion.

			Fair Value Measurements at June 30, 2023 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	$	109,545	$	109,545	$	0	$	0
Certificates of deposit in other banks		245		0		245		0
Debt securities available-for-sale		1,201,253		341,199		860,054		0
Equity securities at fair value		2,545		0		0		2,545
Loans held for sale		238		244		0		0
Loans, net		3,881,677		0		0		3,717,729
Federal Home Loan Bank stock		6,545		0		6,545		0
Federal Reserve Bank stock		4,887		0		4,887		0
Accrued interest receivable		20,257		0		20,257		0
Financial liabilities:
Deposits	$	4,516,660	$	1,361,078	$	3,163,628	$	0
Repurchase agreements		229,020		0		0		229,277
Federal funds purchased		500		0		500		0
Advances from Federal Home Loan Bank		345		0		242		0
Long-term debt		64,350		0		0		52,043
Accrued interest payable		5,624		0		5,624		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

47

The following table presents estimated fair value of CTBI’s financial instruments as of December 31, 2022 and indicates the level within the fair value hierarchy of the valuation techniques.

			Fair Value Measurements at December 31, 2022 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	$	128,686	$	128,686	$	0	$	0
Certificates of deposit in other banks		245		0		245		0
Debt securities available-for-sale		1,256,226		346,265		909,961		0
Equity securities at fair value		2,166		0		0		2,166
Loans held for sale		109		112		0		0
Loans, net		3,663,309		0		0		3,511,810
Federal Home Loan Bank stock		6,676		0		6,676		0
Federal Reserve Bank stock		4,887		0		4,887		0
Accrued interest receivable		19,592		0		19,592		0
Financial liabilities:
Deposits	$	4,426,143	$	1,394,915	$	3,050,144	$	0
Repurchase agreements		215,431		0		0		215,542
Federal funds purchased		500		0		500		0
Advances from Federal Home Loan Bank		355		0		380		0
Long-term debt		57,841		0		0		55,860
Accrued interest payable		2,237		0		2,237		0
Unrecognized financial instruments:
Letters of credit	$	0	$	0	$	0	$	0
Commitments to extend credit		0		0		0		0
Forward sale commitments		0		0		0		0

Note 8 – Revenue Recognition

CTBI’s primary source of revenue is interest income generated from loans and investment securities.  Interest income is recognized according to the terms of the financial instrument agreement over the life of the loan or investment security unless it is determined that the counterparty is unable to continue making interest payments.  Interest income also includes prepaid interest fees from commercial customers, which approximates the interest foregone on the balance of the loan prepaid.

CTBI’s additional source of income, also referred to as noninterest income, includes service charges on deposit accounts, gains on sales of loans, trust and wealth management income, loan related fees, brokerage revenue, and other miscellaneous income and is largely based on contracts with customers.  In these cases, CTBI recognizes revenue when it satisfies a performance obligation by transferring control over a product or service to a customer. CTBI considers a customer to be any party to which we will provide goods or services that are an output of CTBI’s ordinary activities in exchange for consideration.  There is little seasonality with regards to revenue from contracts with customers and all inter-company revenue is eliminated when CTBI’s financial statements are consolidated.

Generally, CTBI enters into contracts with customers that are short-term in nature where the performance obligations are fulfilled and payment is processed at the same time.  Such examples include revenue related to merchant fees, interchange fees, and investment services income.  In addition, revenue generated from existing customer relationships such as deposit accounts are also considered short-term in nature, because the relationship may be terminated at any time and payment is processed at the time performance obligations are fulfilled.  As a result, CTBI does not have contract assets, contract liabilities, or related receivable accounts for contracts with customers.   In cases where collectability is a concern, CTBI does not record revenue.

48

Generally, the pricing of transactions between CTBI and each customer is either (i) established within a legally enforceable contract between the two parties, as is the case with loan sales, or (ii) disclosed to the customer at a specific point in time, as is the case when a deposit account is opened or before a new loan is underwritten.  Fees are usually fixed at a specific amount or as a percentage of a transaction amount.  No judgment or estimates by management are required to record revenue related to these transactions and pricing is clearly identified within these contracts.

CTBI primarily operates in Kentucky and contiguous areas. Therefore, all significant operating decisions are based upon analysis of CTBI as one operating segment.

We disaggregate our revenue from contracts with customers by contract-type and timing of revenue recognition, as we believe it best depicts how the nature, amount, timing, and uncertainty of our revenue and cash flows are affected by economic factors.  Noninterest income not generated from customers during CTBI’s ordinary activities primarily relates to MSRs, gains/losses on the sale of investment securities, gains/losses on the sale of OREO, gains/losses on the sale of property, plant and equipment, and income from bank owned life insurance.

For more information related to our components of noninterest income, see the Condensed Consolidated Statements of Income and Comprehensive Income above.

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)	2023		2022		2023		2022
Numerator:
Net income	$	19,404	$	20,271	$	38,717	$	39,999
Denominator:
Basic earnings per share:
Weighted average shares		17,884		17,835		17,877		17,827
Diluted earnings per share:
Effect of dilutive stock options and restricted stock grants		6		8		8		11
Adjusted weighted average shares		17,890		17,843		17,885		17,838
Earnings per share:
Basic earnings per share	$	1.09	$	1.14	$	2.17	$	2.24
Diluted earnings per share		1.08		1.14		2.16		2.24

There were no options to purchase common shares that were excluded from the diluted calculations above for the three and six months ended June 30, 2023 and 2022. 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.

49

Note 10 – Accumulated Other Comprehensive Income (Loss)

Unrealized gains (losses) on AFS securities

Amounts reclassified from accumulated other comprehensive income (loss) (“AOCI”) and the affected line items in the statements of income during the three and six months ended June 30, 2023 and 2022 were:

	Amounts Reclassified from AOCI
(in thousands)	Three Months Ended June 30					Six Months Ended June 30
	2023		2022			2023		2022
Affected line item in the statements of income
Securities gains (losses)	$	0	$	(1	)	$	4	$	(1	)
Tax expense (benefit)		0		0			1		0
Total reclassifications out of AOCI	$	0	$	(1	)	$	3	$	(1	)

50

Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations

Overview

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is intended to help the reader understand Community Trust Bancorp, Inc. (“CTBI”), our operations, and our present business environment.  The MD&A is provided as a supplement to—and should be read in conjunction with—our condensed consolidated financial statements and the accompanying notes thereto contained in Part I, Item 1 of this quarterly report, as well as our consolidated financial statements, the accompanying notes thereto, and the related Management’s Discussion and Analysis of Financial Condition and Results of Operations in our annual report on Form 10-K for the year ended December, 31, 2022.  The MD&A includes the following sections:

❖ Our Business

❖ Financial Goals and Performance

❖ Results of Operations and Financial Condition

❖ Liquidity and Market Risk

❖ Interest Rate Risk

❖ Capital Resources

❖ Impact of Inflation, Changing Prices, and Economic Conditions

❖ Stock Repurchase Program

❖ 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.  Through our subsidiaries, we have seventy-nine 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, 2023, we had total consolidated assets of $5.5 billion and total consolidated deposits, including repurchase agreements, of $4.7 billion.  Total shareholders’ equity at June 30, 2023 was $660.1 million.  Trust assets under management at June 30, 2023 were $3.3 billion, including CTB’s investment portfolio totaling $1.2 billion.

Through our subsidiaries, CTBI engages in a wide range of commercial and personal banking and trust and wealth management activities, which include accepting time and demand deposits; making secured and unsecured loans to corporations, individuals, and others; providing cash management services to corporate and individual customers; issuing letters of credit; renting safe deposit boxes; and providing funds transfer services.  The lending activities of CTB include making commercial, construction, mortgage, and personal loans.  Lines of credit, revolving lines of credit, term loans, and other specialized loans, including asset-based financing, are also available.  Our corporate subsidiaries act as trustees of personal trusts, as executors of estates, as trustees for employee benefit trusts, as paying agents for bond and stock issues, as investment agent, as depositories for securities, and as providers of full-service brokerage and insurance services.  For further information, see Item 1 of our annual report on Form 10-K for the year ended December 31, 2022.

51

Results of Operations and Financial Condition

We reported earnings for the second quarter 2023 of $19.4 million, or $1.09 per basic share, compared to $19.3 million, or $1.08 per basic share, earned during the first quarter 2023 and $20.3 million, or $1.14 per basic share, earned during the second quarter 2022.  Total revenue was $0.2 million above prior quarter and $2.5 million above prior year same quarter.  Net interest revenue decreased $0.8 million compared to prior quarter but increased $2.3 million compared to prior year same quarter, and noninterest income increased $1.1 million compared to prior quarter and $0.3 million compared to prior year same quarter.  Our provision for credit losses for the quarter increased $0.9 million from prior quarter and was $1.9 million higher than second quarter 2022.  Noninterest expense decreased $0.9 million compared to prior quarter but was $1.0 million higher than prior year same quarter.  Earnings for the six months ended June 30, 2023 were $38.7 million, or $2.17 per basic share, compared to $40.0 million, or $2.24 per basic share, for the six months ended June 30, 2022.

Quarterly Highlights

❖ Net interest income for the quarter of $43.1 million was $0.8 million below prior quarter but $2.3 million above prior year same quarter, as our net interest margin decreased 14 basis points from prior quarter but increased 15 basis points from prior year same quarter.

❖ Provision for credit losses at $2.0 million for the quarter increased $0.9 million from prior quarter and $1.9 million from prior year same quarter.

❖ Our loan portfolio increased $152.3 million, an annualized 16.2%, from March 31, 2023 and $220.4 million, or an annualized 12.0%, from December 31, 2022.

❖ We had net loan charge-offs of $674 thousand, or 0.07% of average loans annualized for the second quarter 2023 compared to $414 thousand, or 0.04% of average loans annualized for the first quarter 2023 and $43 thousand, or less than 0.01% of average loans annualized, for the quarter ended June 30, 2022.

❖ Our total nonperforming loans decreased to $11.7 million at June 30, 2023 from $12.2 million at March 31, 2023 and $15.3 million at December 31, 2022.  Nonperforming assets at $13.8 million decreased $1.2 million from March 31, 2023 and $5.2 million from December 31, 2022.

❖ Deposits, including repurchase agreements, at $4.7 billion decreased $6.5 million, or an annualized 0.6%, from March 31, 2023 but increased $104.1 million, or an annualized 4.5%, from December 31, 2022.

❖ Shareholders’ equity at $660.1 million increased $3.3 million, or an annualized 2.0%, during the quarter and $32.1 million, or an annualized 10.3%, from December 31, 2022.

❖ Noninterest income for the quarter ended June 30, 2023 of $14.8 million was $1.1 million, or 7.9%, above prior quarter and $0.3 million, or 1.8%, above prior year same quarter.

❖ Noninterest expense for the quarter ended June 30, 2023 of $31.0 million was $0.9 million, or 2.7%, below prior quarter but $1.0 million, or 3.5%, above prior year same quarter.

52

Income Statement Review

Six Months Ended June 30							Change 2023 vs. 2022
(dollars in thousands)	2023			2022			Amount			Percent
Net interest income	$	86,995		$	80,822		$	6,173			7.6	%
Provision for credit losses		3,125			952			2,173			228.2
Noninterest income		28,438			29,466			(1,028	)		(3.5	)
Noninterest expense		62,915			59,337			3,578			6.0
Income taxes		10,676			10,000			676			6.8
Net income	$	38,717		$	39,999		$	(1,282	)		(3.2	)%
Average earning assets	$	5,160,712		$	5,137,421		$	23,291			0.5	%
Yield on average earnings assets, tax equivalent*		4.94	%		3.51	%		1.43	%		40.9	%
Cost of interest bearing funds		2.30	%		0.48	%		1.82	%		376.7	%
Net interest margin, tax equivalent*		3.42	%		3.19	%		0.23	%		7.3	%

*Yield on average earning assets and net interest margin are computed on a taxable equivalent basis using a 24.95% tax rate.

Net Interest Income

										Percent Change
										2Q 2023 Compared to:
($ in thousands)	2Q 2023			1Q 2023			2Q 2022			1Q 2023			2Q 2022			YTD 2023			YTD 2022			Percent Change
Components of net interest income:
Income on earning assets	$	64,827		$	60,995		$	45,352			6.3	%		42.9	%	$	125,822		$	88,879			41.6	%
Expense on interest bearing liabilities		21,748			17,079			4,562			27.3			376.7			38,827			8,057			381.9
Net interest income		43,079			43,916			40,790			(1.9	)		5.6			86,995			80,822			7.6
TEQ		298			298			232			0.1			28.6			596			467			27.6
Net interest income, tax equivalent	$	43,377		$	44,214		$	41,022			(1.9	%)		5.7	%	$	87,591		$	81,289			7.8	%
Average yield and rates paid:
Earning assets yield		5.03	%		4.84	%		3.56	%		3.9	%		41.5	%		4.94	%		3.51	%		40.9	%
Rate paid on interest bearing liabilities		2.54			2.06			0.54			23.3			368.2			2.30			0.48			376.7
Gross interest margin		2.49	%		2.78	%		3.02	%		(10.4	)%		(17.5	)%		2.64	%		3.03	%		(12.8	)%
Net interest margin		3.35	%		3.49	%		3.20	%		(4.1	)%		4.7	%		3.42	%		3.19	%		7.3	%
Average balances:
Investment securities	$	1,230,556		$	1,251,948		$	1,454,371			(1.7	)%		(15.3	)%	$	1,241,193		$	1,470,495			(15.5	)%
Loans	$	3,836,446		$	3,739,443		$	3,538,324			2.6	%		8.4	%	$	3,788,213		$	3,489,652			8.6	%
Earning assets	$	5,189,716		$	5,131,385		$	5,140,656			1.1	%		1.0	%	$	5,160,712		$	5,137,421			0.5	%
Interest-bearing liabilities	$	3,435,072		$	3,362,331		$	3,373,741			2.2	%		1.8	%	$	3,398,902		$	3,362,039			1.1	%

53

Net interest income for the quarter of $43.1 million was $0.8 million below prior quarter but $2.3 million above prior year same quarter.  Our net interest margin, on a fully tax equivalent basis, at 3.35% decreased 14 basis points from prior quarter but increased 15 basis points from prior year same quarter.  Our average earning assets increased $58.3 million from prior quarter and $49.1 million from prior year same quarter.  Our yield on average earning assets increased 19 basis points from prior quarter and 147 basis points from prior year same quarter, and our cost of funds increased 48 basis points from prior quarter and 200 basis points from prior year same quarter.  Money market accounts, certificates of deposit, and other time deposits all experienced significant increases in rates during the quarter.  Our net interest income for the six months ended June 30, 2023 was $87.0 million compared to $80.8 million for the six months ended June 30, 2022.

Our ratio of average loans to deposits, including repurchase agreements, was 81.2% for the quarter ended June 30, 2023 compared to 79.8% for the quarter ended March 31, 2023 and 75.2% for the quarter ended June 30, 2022.

Provision for Credit Losses

Our provision for credit losses for the quarter increased $0.9 million from prior quarter and $1.9 million from prior year same quarter.  Year-to-date provision increased $2.2 million from prior year.  Our reserve coverage (allowance for credit losses to nonperforming loans) at June 30, 2023 was 408.9% compared to 382.3% at March 31, 2023 and 305.9% at June 30, 2022.  Our credit loss reserve as a percentage of total loans outstanding at June 30, 2023 was 1.22% compared to 1.24% at March 31, 2023 and 1.19% at June 30, 2022.

Noninterest Income

							Percent Change
							2Q 2023 Compared to:
($ in thousands)	2Q 2023		1Q 2023		2Q 2022		1Q 2023			2Q 2022			YTD 2023		YTD 2022		Percent Change
Deposit related fees	$	7,513	$	7,287	$	7,263		3.1	%		3.4	%	$	14,800	$	14,009		5.6	%
Trust revenue		3,351		3,079		3,198		8.9			4.8			6,430		6,446		(0.2	)
Gains on sales of loans		115		121		519		(5.3	)		(77.9	)		236		1,116		(78.9	)
Loan related fees		1,197		845		1,415		41.7			(15.4	)		2,042		3,477		(41.3	)
Bank owned life insurance revenue		735		858		702		(14.4	)		4.7			1,593		1,393		14.4
Brokerage revenue		388		348		459		11.5			(15.4	)		736		1,049		(29.8	)
Other		1,457		1,144		945		27.4			54.3			2,601		1,976		31.6
Total noninterest income	$	14,756	$	13,682	$	14,501		7.9	%		1.8	%	$	28,438	$	29,466		(3.5	)%

Noninterest income for the quarter ended June 30, 2023 of $14.8 million was $1.1 million, or 7.9%, above prior quarter and $0.3 million, or 1.8%, above prior year same quarter.  The quarter over quarter increase included a $0.2 million increase in deposit related fees, a $0.3 million increase in trust revenue, and a $0.4 million increase in loan related fees due to the change in the fair market value of our mortgage servicing rights. The year over year increase included a $0.3 million increase in deposit related fees, a $0.2 million increase in trust revenue, and a $0.4 million increase in securities gains, partially offset by a $0.4 million decline in gains on sales of loans and a $0.2 million decline in loan related fees also resulting from the fluctuation in the fair market value of our mortgage servicing rights.  Noninterest income for the first six months of 2023 was $28.4 million compared to $29.5 million for the six months ended June 30, 2022.

54

Noninterest Expense

							Percent Change
							2Q 2022 Compared to:
($ in thousands)	2Q 2023		1Q 2023		2Q 2022		1Q 2023			2Q 2022			YTD 2023		YTD 2022		Percent Change
Salaries	$	12,732	$	12,633	$	12,219		0.8	%		4.2	%	$	25,365	$	23,958		5.9	%
Employee benefits		5,573		6,275		6,315		(11.2	)		(11.7	)		11,848		12,114		(2.2	)
Net occupancy and equipment		2,895		3,028		2,756		(4.4	)		5.1			5,923		5,610		5.6
Data processing		2,383		2,303		2,095		3.5			13.8			4,686		4,296		9.1
Legal and professional fees		912		816		884		11.8			3.2			1,728		1,751		(1.3	)
Advertising and marketing		704		820		659		(14.1	)		6.9			1,524		1,411		8.0
Taxes other than property and payroll		433		432		425		0.1			1.7			865		851		1.6
Net other real estate owned expense		61		119		43		(48.4	)		43.6			180		396		(54.6	)
Other		5,332		5,464		4,582		(2.4	)		16.4			10,796		8,950		20.6
Total noninterest expense	$	31,025	$	31,890	$	29,978		(2.7	)%		3.5	%	$	62,915	$	59,337		6.0	%

Noninterest expense for the quarter ended June 30, 2023 of $31.0 million was $0.9 million, or 2.7%, below prior quarter but $1.0 million, or 3.5%, above prior year same quarter.  The decrease in noninterest expense quarter over quarter was primarily a result of a decrease in the accruals for incentive payments based on our current projected earnings for the year.  The year over year increase included a $0.3 million increase in data processing expense, a $0.3 million increase in FDIC insurance premiums, and a $0.1 million increase in occupancy and equipment.  A year over year decrease in personnel costs of $0.2 million was the result of a reduction in the accruals for incentive payments of $1.3 million, partially offset by increases in salary expense ($0.5 million), group medical and life insurance expense ($0.5 million), and other employee benefits ($0.1 million).  Noninterest expense for the first six months of 2023 was $62.9 million compared to $59.3 million for the six months ended June 30, 2022.

Balance Sheet Review

CTBI’s total assets at June 30, 2023 of $5.5 billion decreased $8.5 million, or 0.6% annualized, from March 31, 2023 but increased $140.5 million, or an annualized 5.3%, from December 31, 2022.  Loans outstanding at June 30, 2023 were $3.9 billion, an increase of $152.3 million, or an annualized 16.2%, from March 31, 2023 and $220.4 million, or an annualized 12.0%, from December 31, 2022.  The increase in loans from prior quarter included a $73.5 million increase in the commercial loan portfolio, a $44.6 million increase in the residential loan portfolio, a $33.5 million increase in the indirect consumer loan portfolio, and a $0.7 million increase in the consumer direct loan portfolio.  CTBI’s investment portfolio decreased $39.7 million, or an annualized 12.8%, from March 31, 2023 and $55.0 million, or an annualized 8.8%, from December 31, 2022.  Deposits in other banks decreased $117.5 million from prior quarter and $19.8 million from December 31, 2022.  Deposits, including repurchase agreements, at $4.7 billion decreased $6.5 million, or an annualized 0.6%, from March 31, 2023 but increased $104.1 million, or an annualized 4.5%, from December 31, 2022.

55

Shareholders’ equity at June 30, 2023 was $660.1 million, a $3.3 million, or an annualized 2.0%, increase from the $656.8 million at March 31, 2023 and a $32.1 million, or an annualized 10.3%, increase from the $628.0 million at December 31, 2022, as unrealized losses on our securities portfolio continue to impact equity.  Net unrealized losses on securities, net of deferred taxes, were $121.3 million at June 30, 2023, compared to $112.4 million at March 31, 2023 and $97.9 million at June 30, 2022.  Management has evaluated the unrealized losses and determined that they were primarily driven by market rates.  Management has the ability and intent to hold these securities to recovery or maturity.  CTBI’s annualized dividend yield to shareholders as of June 30, 2023 was 4.95%.

Loans

(dollars in thousands)			June 30, 2023
Loan Category	Balance		Variance from Prior Year			Net (Charge- Offs)/ Recoveries			Nonperforming		ACL
Commercial:
Hotel/motel	$	372,981		8.5	%	$	0		$	0	$	5,192
Commercial real estate residential		393,309		5.5			53			1,034		3,749
Commercial real estate nonresidential		787,598		3.3			324			1,282		7,797
Dealer floorplans		76,903		(0.8	)		0			0		1,157
Commercial other		319,838		2.4			(1,080	)		1,030		6,176
Total commercial		1,950,629		4.4			(703	)		3,346		24,071
Residential:
Real estate mortgage		883,104		7.0			(79	)		7,299		7,884
Home equity		132,033		9.5			(10	)		654		1,108
Total residential		1,015,137		7.4			(89	)		7,953		8,992
Consumer:
Consumer direct		157,848		0.2			(43	)		6		2,563
Consumer indirect		806,081		9.3			(253	)		439		12,392
Total consumer		963,929		7.7			(296	)		445		14,955
Total loans	$	3,929,695		5.9	%	$	(1,088	)	$	11,744	$	48,018

Total Deposits and Repurchase Agreements

							Percent Change 2Q 2023 Compared to:
(dollars in thousands)	2Q 2023		1Q 2023		YE 2022		1Q 2023			YE 2022
Non-interest bearing deposits	$	1,361,078	$	1,409,839	$	1,394,915		(3.5	)%		(2.4	)%
Interest bearing deposits
Interest checking		142,542		120,678		112,265		18.1			27.0
Money market savings		1,389,081		1,408,314		1,348,809		(1.4	)		3.0
Savings accounts		611,772		642,232		654,380		(4.7	)		(6.5	)
Time deposits		1,012,187		962,361		915,774		5.2			10.5
Repurchase agreements		229,020		208,777		215,431		9.7			6.3
Total interest bearing deposits and repurchase agreements		3,384,602		3,342,362		3,246,659		1.3			4.2
Total deposits and repurchase agreements	$	4,745,680	$	4,752,201	$	4,641,574		(0.1	)%		2.2	%

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Asset Quality

Our total nonperforming loans decreased to $11.7 million at June 30, 2023 from $12.2 million at March 31, 2023 and $15.3 million at December 31, 2022.  Prior year nonperforming loans, as previously reported, exclude troubled debt restructurings which have been eliminated in the current period due to implementation of Accounting Standard Update 2022-02.  Accruing loans 90+ days past due at $6.4 million increased $0.2 million from prior quarter but decreased $2.1 million from December 31, 2022.  Nonaccrual loans at $5.3 million decreased $0.6 million from prior quarter and $1.5 million from December 31, 2022.  Accruing loans 30-89 days past due at $12.2 million increased $0.4 million from prior quarter but decreased $3.1 million from December 31, 2022.  Our loan portfolio management processes focus on the immediate identification, management, and resolution of problem loans to maximize recovery and minimize loss.  Our loan portfolio risk management processes include weekly delinquent loan review meetings at the market levels and monthly delinquent loan review meetings involving senior corporate management to review all nonaccrual loans and loans 30 days or more past due.  Any activity regarding a criticized/classified loan (i.e. problem loan) must be approved by CTB’s Watch List Asset Committee (i.e. Problem Loan Committee).  CTB’s Watch List Asset Committee also meets on a quarterly basis and reviews every criticized/classified loan of $100,000 or greater.  CTB’s Loan Portfolio Risk Management Committee also meets quarterly focusing on the overall asset quality and risk metrics of the loan portfolio.  We also have a Loan Review Department that reviews every market within CTB annually and performs extensive testing of the loan portfolio to assure the accuracy of loan grades and classifications for delinquency, if a borrower is experiencing financial difficulty with significant payment delay, nonaccrual status, and adequate loan loss reserves.  The Loan Review Department has annually reviewed, on average, 96% of the outstanding commercial loan portfolio for the past three years.  The average annual review percentage of the consumer and residential loan portfolio for the past three years was 85% based on the loan production during the number of months included in the review scope.  The review scope is generally four to six months of production.  CTBI generally does not offer high risk loans such as option ARM products, high loan to value ratio mortgages, interest-only loans, loans with initial teaser rates, or loans with negative amortizations, and therefore, CTBI would have no significant exposure to these products.

For further information regarding nonperforming loans, see Note 4 to the condensed consolidated financial statements contained herein.

Our level of foreclosed properties at $2.0 million at June 30, 2023 was a $0.8 million decrease from the $2.8 million at March 31, 2023 and a $1.7 million decrease from the $3.7 million at December 31, 2022.  Sales of foreclosed properties for the six months ended June 30, 2023 totaled $1.7 million while new foreclosed properties totaled $0.2 million.  At June 30, 2023, the book value of properties under contracts to sell was $0.7 million; however, the closings had not occurred at quarter-end.

We had net loan charge-offs of $674 thousand, or 0.07% of average loans annualized, for the second quarter 2023 compared to $414 thousand, or 0.04% of average loans annualized, for the first quarter 2023 and $43 thousand, or less than 0.01% of average loans annualized, for the quarter ended June 30, 2022.  Net charge-offs for the six months ended June 30, 2023 were $1.1 million, or 0.06% of average loans annualized, compared to $0.4 million, or 0.02% of average loans annualized, for the six months ended June 30, 2022.

Dividends

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

Pay Date	Record Date	Amount Per Share
July 1, 2023	June 15, 2023	$	0.440
April 1, 2023	March 15, 2023	$	0.440
January 1, 2023	December 15, 2022	$	0.440
October 1, 2022	September 15, 2022	$	0.440
July 1, 2022	June 15, 2022	$	0.400
April 1, 2022	March 15, 2022	$	0.400

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On July 25, 2023, the Board of Directors of CTBI declared a quarterly cash dividend of $0.46 per share to be paid on October 1, 2023 to shareholders of record on September 15, 2023.  This represents an increase of 4.5% in the quarterly cash dividend.

Allowance for Credit Losses

Our reserve coverage (allowance for credit losses to nonperforming loans) at June 30, 2023 was 408.9% compared to 382.3% at March 31, 2023 and 300.4% at December 31, 2022.  Our credit loss reserve as a percentage of total loans outstanding at June 30, 2023 was 1.22% compared to 1.24% at March 31, 2023 and December 31, 2022.

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, 2023, we had approximately $109.5 million in cash and cash equivalents and approximately $213.5 million in unpledged securities valued at estimated fair value designated as available-for-sale and available to meet liquidity needs on a continuing basis compared to $128.7 million and $309.2 million at December 31, 2022.  Additional asset-driven liquidity is provided by the remainder of the securities portfolio and the repayment of loans.  In addition to core deposit funding, we also have a variety of other short-term and long-term funding sources available.  We also rely on Federal Home Loan Bank advances for both liquidity and management of our asset/liability position.  Federal Home Loan Bank advances were $0.3 million at June 30, 2023 compared to $0.4 million at December 31, 2022.  As of June 30, 2023, we had a $539.2 million available borrowing position with the Federal Home Loan Bank, compared to $501.0 million at December 31, 2022.  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, 2023 we had $50 million in lines of credit with various correspondent banks available to meet any future cash needs compared to $75 million at December 31, 2022.  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, 2023 were deposits with the Federal Reserve of $55.1 million, compared to $72.6 million at December 31, 2022.  At June 30, 2023, we had $3.0 million in federal funds sold; however, we had no federal funds sold as of December 31, 2022.  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, 2023, available-for-sale (“AFS”) securities comprised all of the total investment portfolio, and the AFS portfolio was approximately 182% of equity capital.  Eighty-three percent of the pledge-eligible portfolio was pledged.

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Interest Rate Risk

We consider interest rate risk one of our most significant market risks.  Interest rate risk is the exposure to adverse changes in net interest income due to changes in interest rates.  Consistency of our net interest revenue is largely dependent upon the effective management of interest rate risk.  We employ a variety of measurement techniques to identify and manage our interest rate risk, including the use of an earnings simulation model to analyze net interest income sensitivity to changing interest rates.  The model is based on actual cash flows and repricing characteristics for on and off-balance sheet instruments and incorporates market-based assumptions regarding the effect of changing interest rates on the prepayment rates of certain assets and liabilities.  Assumptions based on the historical behavior of deposit rates and balances in relation to changes in interest rates are also incorporated into the model.  These assumptions are inherently uncertain, and as a result, the model cannot precisely measure net interest income or precisely predict the impact of fluctuations in interest rates on net interest income.  Actual results will differ from simulated results due to timing, magnitude, and frequency of interest rate changes as well as changes in market conditions and management strategies.

CTBI’s Asset/Liability Management Committee (ALCO), which includes executive and senior management representatives and reports to the Board of Directors, monitors and manages interest rate risk within Board-approved policy limits.  Our current exposure to interest rate risks is determined by measuring the anticipated change in net interest income spread evenly over the twelve-month period.

Capital Resources

We continue to offer a dividend to our shareholders, providing an annualized dividend yield for the quarter ended June 30, 2023 of 4.95%.  Shareholders’ equity increased $3.3 million, or an annualized 2.0%, during the quarter and $28.1 million, or 4.4%, from June 30, 2022, as unrealized losses on our securities portfolio continue to impact equity.  Our primary source of capital growth is the retention of earnings.  Cash dividends were $0.88 per share and $0.80 per share for the six months ended June 30, 2023 and 2022, respectively.  We retained 59.4% of our earnings for the first six months of 2023 compared to 64.3% for the first six months of 2022.

Insured depository institutions are required to meet certain capital level requirements.  On October 29, 2019, federal banking regulators adopted a final rule to simplify the regulatory capital requirements for eligible community banks and holding companies that opt-in to the community bank leverage ratio framework (the “CBLR framework”), as required by Section 201 of the Economic Growth, Relief and Consumer Protection Act of 2018.  Under the final rule, which became effective as of January 1, 2020, community banks and holding companies (which includes CTB and CTBI) that satisfy certain qualifying criteria, including having less than $10 billion in average total consolidated assets and a leverage ratio (referred to as the “community bank leverage ratio”) of greater than 9%, were eligible to opt-in to the CBLR framework.  The community bank leverage ratio is the ratio of a banking organization’s Tier 1 capital to its average total consolidated assets, both as reported on the banking organization’s applicable regulatory filings.  Accordingly, a qualifying community banking organization that has a community bank leverage ratio greater than 9% will be considered to have met: (i) the risk-based and leverage capital requirements of the generally applicable capital rules; (ii) the capital ratio requirements in order to be considered well-capitalized under the prompt corrective action framework; and (iii) any other applicable capital or leverage requirements.

In April 2020, as directed by Section 4012 of the CARES Act, the regulatory agencies introduced temporary changes to the CBLR.  These changes, which subsequently were adopted as a final rule, temporarily reduced the CBLR requirement to 8% through the end of calendar year 2020.  Beginning in calendar year 2021, the CBLR requirement increased to 8.5% for the calendar year before returning to 9% in calendar year 2022.  Management elected to use the CBLR framework for CTBI and CTB.  CTBI’s CBLR ratio as of June 30, 2023 was 13.82%.  CTB’s CBLR ratio as of June 30, 2023 was 13.24%.

As of June 30, 2023, we are not aware of any current recommendations by banking regulatory authorities which, if they were to be implemented, would have, or are reasonably likely to have, a material adverse impact on our liquidity, capital resources, or operations.

Impact of Inflation, Changing Prices, and Economic Conditions

The majority of our assets and liabilities are monetary in nature.  Therefore, CTBI differs greatly from most commercial and industrial companies that have significant investment in nonmonetary assets, such as fixed assets and inventories.  However, inflation does have an important impact on the growth of assets in the banking industry and on the resulting need to increase equity capital at higher than normal rates in order to maintain an appropriate equity to assets ratio.  Inflation also affects other expenses, which tend to rise during periods of general inflation.

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We believe one of the most significant impacts on financial and operating results is our ability to react to changes in interest rates.  We seek to maintain an essentially balanced position between interest rate sensitive assets and liabilities in order to protect against the effects of wide interest rate fluctuations.

Stock Repurchase Program

CTBI’s stock repurchase program began in December 1998 with the authorization to acquire up to 500,000 shares and was increased by an additional 1,000,000 shares in each of July 2000, May 2003, and March 2020.  CTBI repurchased 32,664 shares of its common stock during the first quarter 2020, leaving 1,034,706 shares remaining under our current repurchase authorization.  As of June 30, 2023, a total of 2,465,294 shares have been repurchased through this program.

On August 16, 2022, the Inflation Reduction Act (“IRA”) was signed into law in the United States.  Among other provisions, the IRA imposes an excise tax of 1% tax on the fair market value of net stock repurchases made after December 31, 2022.  The impact of this provision will be dependent on the extent of share repurchases made in future periods.

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.

Our accounting policies are described in Note 1 to the condensed consolidated financial statements contained herein.  We have identified the following critical accounting policies:

Allowance for Credit Losses – CTBI accounts for the allowance for credit losses (“ACL”) and the reserve for unfunded commitments in accordance with Accounting Standards Update (“ASU”) 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, and its related subsequent amendments, commonly known as CECL.

We disaggregate our portfolio loans into portfolio segments for purposes of determining the ACL.  Our loan portfolio segments include commercial, residential mortgage, and consumer.  We further disaggregate our portfolio segments into classes for purposes of monitoring and assessing credit quality based on certain risk characteristics.  For an analysis of CTBI’s ACL by portfolio segment and credit quality information by class, refer to Note 4 to the condensed consolidated financial statements contained herein.

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CTBI maintains the ACL to absorb the amount of credit losses that are expected to be incurred over the remaining contractual terms of the related loans.  Effective January 1, 2023, CTBI implemented ASU 2022-02, Financial Instruments-Credit Losses (Topic 326) Troubled Debt Restructurings and Vintage Disclosures, an amendment to 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.  The amendments in this ASU eliminate the accounting guidance for troubled debt restructurings by creditors in Subtopic 310-40, Receivables—Troubled Debt Restructurings by Creditors, while enhancing disclosure requirements for certain loan refinancings and restructurings by creditors when a borrower is experiencing financial difficulty along with requiring that disclosures be added by year of origination for gross charge-off information for financing receivables.  Accrued interest receivable on loans is presented in the consolidated financial statements as a component of other assets.  When accrued interest is deemed to be uncollectible (typically when a loan is placed on nonaccrual status), interest income is reversed.  In the event that collection of principal becomes uncertain, CTBI has policies in place to reverse accrued interest in a timely manner.  Therefore, CTBI elected ASU 2019-04 which allows that accrued interest would continue to be presented separately and not part of the amortized cost of the loan.  For additional information on CTBI’s accounting policies related to nonaccrual loans, refer to Note 1 to the condensed consolidated financial statements contained herein.

Credit losses are charged and recoveries are credited to the ACL.  The ACL is maintained at a level CTBI considers to be adequate and is based on ongoing quarterly assessments and evaluations of the collectability of loans, including historical credit loss experience, current and forecasted market and economic conditions, and consideration of various qualitative factors that, in management’s judgment, deserve consideration in estimating expected credit losses.  Provisions for credit losses are recorded for the amounts necessary to adjust the ACL to CTBI’s current estimate of expected credit losses on portfolio loans.  CTBI’s strategy for credit risk management includes a combination of conservative exposure limits significantly below legal lending limits and conservative underwriting, documentation, and collection standards.  The strategy also emphasizes diversification on a geographic, industry, and customer level, regular credit examinations, and quarterly management reviews of large credit exposures and loans experiencing deterioration of credit quality.

CTBI’s methodology for determining the ACL requires significant management judgment and includes an estimate of expected credit losses on a collective basis for groups of loans with similar risk characteristics and specific allowances for loans which are individually evaluated.

Larger commercial loans with balances exceeding $1 million that exhibit probable or observed credit weaknesses and (i) have a criticized risk rating, (ii) are on nonaccrual status, (iii) have a borrower experiencing financial difficulty with significant payment delay, or (iv) are 90 days or more past due, are individually evaluated for an ACL.  CTBI considers the current value of collateral, credit quality of any guarantees, the guarantor’s liquidity and willingness to cooperate, the loan structure and other factors when determining the amount of the ACL.  Other factors may include the borrower’s susceptibility to risks presented by the forecasted macroeconomic environment, the industry and geographic region of the borrower, size and financial condition of the borrower, cash flow and leverage of the borrower, and our evaluation of the borrower’s management.  Significant management judgment is required when evaluating which of these factors are most relevant in individual circumstances, and when estimating the amount of expected credit losses based on those factors.  When loans are individually evaluated, allowances are determined based on management’s estimate of the borrower’s ability to repay the loan given the availability of collateral and other sources of cash flow, as well as an evaluation of legal options available to CTBI.  Allowances for individually evaluated loans that are collateral-dependent are typically measured based on the fair value of the underlying collateral, less expected costs to sell where applicable.  For collateral-dependent financial assets, the credit loss expected may be zero if the fair value less costs to sell exceeds the amortized cost of the loan.  Loans shall not be included in both collective assessments and individual assessments.  Individually evaluated loans that are not collateral-dependent are measured based on the present value of expected future cash flows discounted at the loan’s effective interest rate.  Specific allowances on individually evaluated commercial loans, including loans to borrowers experiencing financial difficulty, are reviewed quarterly and adjusted as necessary based on changing borrower and/or collateral conditions and actual collection and charge-off experience.  Regardless of an initial measurement method, once it is determined that foreclosure is probable, the ACL is measured based on the fair value of the collateral as of the measurement date.  As a practical expedient, the fair value of the collateral may be used for a loan when determining the ACL for which the repayment is expected to be provided substantially through the operation or sale of the collateral when the borrower is experiencing financial difficulty.  The fair value shall be adjusted for selling costs when foreclosure is probable.

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Expected credit losses are estimated on a collective basis for loans that are not individually evaluated.  These include commercial loans that do not meet the criteria for individual evaluation as well as homogeneous loans in the residential mortgage and consumer portfolio segments.  For collectively evaluated commercial loans prior to June 30, 2023, CTBI used a static pool methodology based on our risk rating system.  Other homogenous loans such as the residential mortgage and consumer portfolio segments derive their ACL from vintage modeling.  Vintage modeling was chosen primarily because these loans have fixed amortization schedules, and it allows CTBI to track loans from origination to completion, including repayments and prepayments, and captures net charge-offs by the different vintages providing historical loss rates.  These are the two primary models utilized for ACL determination although there are additional models for specific processes in addition.  CTBI’s expected credit loss models were developed based on historical credit loss experience and observations of migration patterns for various credit risk characteristics (such as internal credit risk grades, external credit ratings or scores, delinquency status, etc.) over time, with those observations evaluated in the context of concurrent macroeconomic conditions.  CTBI developed our models from historical observations capturing a full economic cycle when possible.

During the second quarter ended June 30, 2023, CTBI began using a third party ACL software to calculate reserve estimates.  During the implementation process, discounted cash flow modeling was chosen for all loan segments.  The primary reasons that contributed to this decision were: DCF models allow for the effective incorporation of a reasonable and supportable forecast in a directionally consistent and objective manner; the analysis aligns well with other calculations outside of the ACL estimation which will mitigate model risk in other areas; and peer data is available for certain inputs if first party data is not available or meaningful.  Expected credit losses are estimated on a collective basis for loans that are not individually evaluated.  These include commercial loans that do not meet the criteria for individual evaluation as well as homogeneous loans in the residential mortgage and consumer portfolio segments.   See Note 4 to the condensed consolidated financial statements contained herein for information on CTBI’s risk rating system.

CTBI’s expected credit loss models consider historical credit loss experience, peer data, current market and economic conditions, and forecasted changes in market and economic conditions if such forecasts are considered reasonable and supportable.  Generally, CTBI considers our forecasts to be reasonable and supportable for a period of up to one year from the estimation date.  For periods beyond the reasonable and supportable forecast period, expected credit losses are estimated by reverting to historical loss information.  CTBI evaluates the length of our reasonable and supportable forecast period, our reversion period, and reversion methodology at least annually, or more often if warranted by economic conditions or other circumstances.

Other qualitative factors are used by CTBI in determining the ACL. These considerations inherently require significant management judgment to determine the appropriate factors to be considered and the extent of their impact on the ACL estimate.  Qualitative factors are used to capture characteristics in the portfolio that impact expected credit losses but that are not fully captured within CTBI’s expected credit loss models.  These include adjustments for changes in policies or procedures in underwriting, monitoring or collections, lending and risk management personnel, and results of internal audit and quality control reviews.  These may also include adjustments, when deemed necessary, for specific idiosyncratic risks such as geopolitical events, natural disasters and their effects on regional borrowers, and changes in product structures.  Qualitative factors may also be used to address the impacts of unforeseen events on key inputs and assumptions within CTBI’s expected credit loss models, such as the reasonable and supportable forecast period, changes to historical loss information, or changes to the reversion period or methodology.  When evaluating the adequacy of allowances, consideration is also given to regional geographic concentrations and the closely associated effect that changing economic conditions may have on CTBI’s customers.

Overall, the collective evaluation process requires significant management judgment when determining the estimation methodology and inputs into the models, as well as in evaluating the reasonableness of the modeled results and the appropriateness of qualitative adjustments.  CTBI’s forecasts of market and economic conditions and the internal risk grades assigned to loans in the commercial portfolio segment are examples of inputs to the expected credit loss models that require significant management judgment.  These inputs have the potential to drive significant variability in the resulting ACL.

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The reserve for unfunded commitments is maintained at a level believed by management to be sufficient to absorb estimated expected credit losses related to unfunded credit facilities and is included in other liabilities in the consolidated balance sheets.  The determination of the adequacy of the reserve is based upon expected credit losses over the remaining contractual life of the commitments, taking into consideration the current funded balance and estimated exposure over the reasonable and supportable forecast period.  This process takes into consideration the same risk elements that are analyzed in the determination of the adequacy of CTBI’s ACL, as previously discussed.  Net adjustments to the reserve for unfunded commitments are included in other noninterest expense in the consolidated statements of income.

Goodwill – Business combinations entered into by CTBI typically include the recognition of goodwill.  U.S. generally accepted accounting principles (“GAAP”) require goodwill to be tested for impairment on an annual basis, which for CTBI is October 1, and more frequently if events or circumstances indicate that there may be impairment.  Refer to Note 1 to the condensed consolidated financial statements contained herein for a discussion on the methodology used by CTBI to assess goodwill for impairment.

Impairment exists when a reporting unit’s carrying amount of goodwill exceeds its implied fair value.  In testing goodwill for impairment, U.S. GAAP permits companies to first assess qualitative factors to determine whether it is more likely than not that its fair value is less than its carrying amount.  In this qualitative assessment, CTBI evaluates events and circumstances which may include, but are not limited to, the general economic environment, banking industry and market conditions, the overall financial performance of CTBI, and the performance of CTBI’s common stock, to determine if it is not more likely than not that the fair value is less than its carrying amount.  If the quantitative impairment test is required or the decision to bypass the qualitative assessment is elected, CTBI performs the goodwill impairment test by comparing its fair value with its carrying amount, including goodwill.  If the carrying amount exceeds its fair value, an impairment loss is recognized in an amount equal to that excess, limited to the total amount of goodwill recorded.  A recognized impairment loss cannot be reversed in future periods even if the fair value of the reporting unit subsequently recovers.

The fair value of CTBI is the price that would be received to sell the company as a whole in an orderly transaction between market participants at the measurement date.  The determination of the fair value is a subjective process that involves the use of estimates and judgments, particularly related to cash flows, the appropriate discount rates and an applicable control premium.  CTBI employs an income-based approach, utilizing forecasted cash flows and the estimated cost of equity as the discount rate.  Significant management judgment is necessary in the preparation of the forecasted cash flows surrounding expectations for earnings projections, growth and credit loss expectations, and actual results may differ from forecasted results.

Income Taxes – Income tax liabilities or assets are established for the amount of taxes payable or refundable for the current year.  Deferred tax liabilities (“DTLs”) and deferred tax assets (“DTAs”) are also established for the future tax consequences of events that have been recognized in CTBI’s financial statements or tax returns.  A DTL or DTA is recognized for the estimated future tax effects attributable to temporary differences and deductions that can be carried forward (used) in future years.  The valuation of current and deferred income tax liabilities and assets is considered critical, as it requires management to make estimates based on provisions of the enacted tax laws.  The assessment of tax liabilities and assets involves the use of estimates, assumptions, interpretations, and judgments concerning certain accounting pronouncements and federal and state tax codes.

Fair Value Measurements – As a financial services company, the carrying value of certain financial assets and liabilities is impacted by the application of fair value measurements, either directly or indirectly.  In certain cases, an asset or liability is measured and reported at fair value on a recurring basis, such as available-for-sale investment securities.  In other cases, management must rely on estimates or judgments to determine if an asset or liability not measured at fair value warrants an impairment write-down or whether a valuation reserve should be established.  Given the inherent volatility, the use of fair value measurements may have a significant impact on the carrying value of assets or liabilities or result in material changes to the consolidated financial statements from period to period.  Detailed information regarding fair value measurements can be found in Note 7 to the condensed consolidated financial statements contained herein.

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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 3.92% over one year and 7.36% over two years.  A 200 basis point decrease in the yield curve would decrease net interest income by an estimated 3.63% over one year and 2.89% 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, 2022.

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 Vice Chairman, President, and 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, 2023 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 six months ended June 30, 2023 that have materially affected, or are reasonably likely to materially affect, CTBI’s internal control over financial reporting.

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PART II - OTHER INFORMATION

Item 1.	Legal Proceedings	None
Item 1A.	Risk Factors	None
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	None
Item 3.	Defaults Upon Senior Securities	None
Item 4.	Mine Safety Disclosure	Not applicable
Item 5.	Other Information:
	(a)      Information required to be disclosed in a report on Form 8-K	None
	(b)      Changes to director nomination procedures	None
	(c)      Insider trading arrangements
	During the three months ended June 30, 2023, no director or officer of CTBI adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.
Item 6.	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 – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL	Exhibit 101.INS
	(4)    XBRL Taxonomy Extension Schema Document	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
	(9)    Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)	Exhibit 104

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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 8, 2023	By:
	/s/ Mark A. Gooch
	Mark A. Gooch
	Vice Chairman, President, and Chief Executive Officer
	/s/ Kevin J. Stumbo
	Kevin J. Stumbo
	Executive Vice President, Chief Financial Officer,
	and Treasurer

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EX-31.1

Exhibit 31.1

Certification of Principal Executive Officer

I, Mark A. Gooch, Vice Chairman, President, and Chief Executive Officer of Community Trust Bancorp, Inc. (“CTBI”), certify that:

(1) I have reviewed this quarterly report on Form 10-Q of Community Trust Bancorp, Inc.;

(2) Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

(3) Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, and cash flows of CTBI as of, and for, the periods presented in this report;

(4) CTBI’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for CTBI and have:

(a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to CTBI, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) evaluated the effectiveness of CTBI’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) disclosed in this report any change in CTBI’s internal control over financial reporting that occurred during CTBI’s most recent fiscal quarter (CTBI’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonable likely to materially affect, CTBI’s internal control over financial reporting; and

(5) CTBI’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to CTBI’s auditors and the audit committee of CTBI’s board of directors (or persons performing the equivalent functions):

(a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect CTBI’s ability to record, process, summarize and report financial information; and

(b) any fraud, whether or not material, that involves management or other employees who have a significant role in CTBI’s internal control over financial reporting.

/s/ Mark A. Gooch

Mark A. Gooch

Vice Chairman, President, and Chief Executive Officer

August 8, 2023

EX-31.2

Exhibit 31.2

Certification of Principal Financial Officer

I, Kevin J. Stumbo, Executive Vice President, Chief Financial Officer, and Treasurer of Community Trust Bancorp, Inc. (“CTBI”), certify that:

(1) I have reviewed this quarterly report on Form 10-Q of Community Trust Bancorp, Inc.;

(2) Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

(3) Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, and cash flows of CTBI as of, and for, the periods presented in this report;

(4) CTBI’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for CTBI and have:

(a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to CTBI, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) evaluated the effectiveness of CTBI’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) disclosed in this report any change in CTBI’s internal control over financial reporting that occurred during CTBI’s most recent fiscal quarter (CTBI’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonable likely to materially affect, CTBI’s internal control over financial reporting; and

(5) CTBI’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to CTBI’s auditors and the audit committee of CTBI’s board of directors (or persons performing the equivalent functions):

(a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect CTBI’s ability to record, process, summarize and report financial information; and

(b) any fraud, whether or not material, that involves management or other employees who have a significant role in CTBI’s internal control over financial reporting.

/s/ Kevin J. Stumbo

Kevin J. Stumbo

Executive Vice President, Chief Financial Officer, and Treasurer

August 8, 2023

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the quarterly report of Community Trust Bancorp, Inc. (“CTBI”) on Form 10-Q for the period ended June 30, 2023 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Mark A. Gooch, Vice Chairman, President, and Chief Executive Officer of CTBI, certify, pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of CTBI.

/s/ Mark A. Gooch

Mark A. Gooch

Vice Chairman, President, and Chief Executive Officer

August 8, 2023

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the quarterly report of Community Trust Bancorp, Inc. (“CTBI”) on Form 10-Q for the period ended June 30, 2023 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Kevin J. Stumbo, Executive Vice President, Chief Financial Officer, and Treasurer of CTBI, certify, pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of CTBI.

/s/ Kevin J. Stumbo

Kevin J. Stumbo

Executive Vice President, Chief Financial Officer, and Treasurer

August 8, 2023

XML

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2023	Jul. 31, 2023
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Quarterly Report	true
Document Period End Date	Jun. 30, 2023
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q2
Document Transition Report	false
Entity File Number	001-31220
Entity Registrant Name	COMMUNITY TRUST BANCORP INC /KY/
Entity Central Index Key	0000350852
Entity Incorporation, State or Country Code	KY
Entity Tax Identification Number	61-0979818
Entity Address, Address Line One	346 North Mayo Trail
Entity Address, Address Line Two	P.O. Box 2947
Entity Address, City or Town	Pikeville
Entity Address, State or Province	KY
Entity Address, Postal Zip Code	41502
City Area Code	606
Local Phone Number	432-1414
Title of 12(b) Security	Common Stock
Trading Symbol	CTBI
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		17,991,419

XML

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Assets:
Cash and due from banks	$ 48,915	$ 51,306
Interest bearing deposits	57,630	77,380
Federal funds sold	3,000	0
Cash and cash equivalents	109,545	128,686
Certificates of deposit in other banks	245	245
Debt securities available-for-sale at fair value (amortized cost of $1,362,748 and $1,430,605, respectively)	1,201,253	1,256,226
Equity securities at fair value	2,545	2,166
Loans held for sale	238	109
Loans	3,929,695	3,709,290
Allowance for credit losses	(48,018)	(45,981)
Net loans	3,881,677	3,663,309
Premises and equipment, net	42,911	42,633
Operating right-of-use assets	13,476	13,809
Finance right-of-use assets	3,202	3,262
Federal Home Loan Bank stock	6,545	6,676
Federal Reserve Bank stock	4,887	4,887
Goodwill	65,490	65,490
Bank owned life insurance	93,775	92,746
Mortgage servicing rights	8,230	8,468
Other real estate owned	2,047	3,671
Deferred tax asset	34,591	39,878
Accrued interest receivable	20,257	19,592
Other assets	29,884	28,463
Total assets	5,520,798	5,380,316
Deposits:
Noninterest bearing	1,361,078	1,394,915
Interest bearing	3,155,582	3,031,228
Total deposits	4,516,660	4,426,143
Repurchase agreements	229,020	215,431
Federal funds purchased	500	500
Advances from Federal Home Loan Bank	345	355
Long-term debt	64,350	57,841
Operating lease liability	13,843	14,160
Finance lease liability	3,474	3,468
Accrued interest payable	5,624	2,237
Other liabilities	26,857	32,134
Total liabilities	4,860,673	4,752,269
Shareholders' equity:
Preferred stock, 300,000 shares authorized and unissued	0	0
Common stock, $5.00 par value, shares authorized 25,000,000; shares issued and outstanding 2023 - 17,983,700; 2022 - 17,918,280	89,918	89,591
Capital surplus	229,943	229,012
Retained earnings	461,578	438,596
Accumulated other comprehensive loss, net of tax	(121,314)	(129,152)
Total shareholders' equity	660,125	628,047
Total liabilities and shareholders' equity	$ 5,520,798	$ 5,380,316

XML

Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Assets:
Debt securities available-for-sale at amortized cost	$ 1,362,748	$ 1,430,605
Shareholders' equity:
Preferred stock, shares authorized (in shares)	300,000	300,000
Common stock, par value (in dollars per share)	$ 5	$ 5
Common stock, shares authorized (in shares)	25,000,000	25,000,000
Common stock, shares issued (in shares)	17,983,700	17,918,280
Common stock, shares outstanding (in shares)	17,983,700	17,918,280

XML

Condensed Consolidated Statements of Income and Comprehensive Income (Loss) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Interest income:
Interest and fees on loans, including loans held for sale	$ 55,822	$ 39,234	$ 107,769	$ 77,401
Interest and dividends on securities
Taxable	6,811	4,944	13,569	9,328
Tax exempt	669	752	1,351	1,524
Interest and dividends on Federal Reserve Bank and Federal Home Loan Bank stock	172	134	346	248
Interest on Federal Reserve Bank deposits	1,289	273	2,639	355
Other, including interest on federal funds sold	64	15	148	23
Total interest income	64,827	45,352	125,822	88,879
Interest expense:
Interest on deposits	18,462	3,847	32,853	6,801
Interest on repurchase agreements and federal funds purchased	2,190	336	3,806	590
Interest on advances from Federal Home Loan Bank	7	1	50	1
Interest on long-term debt	1,089	378	2,118	665
Total interest expense	21,748	4,562	38,827	8,057
Net interest income	43,079	40,790	86,995	80,822
Provision for credit losses	2,009	77	3,125	952
Net interest income after provision for credit losses	41,070	40,713	83,870	79,870
Noninterest income:
Deposit related fees	7,513	7,263	14,800	14,009
Gains on sales of loans, net	115	519	236	1,116
Trust and wealth management income	3,351	3,198	6,430	6,446
Loan related fees	1,197	1,415	2,042	3,477
Bank owned life insurance	735	702	1,593	1,393
Brokerage revenue	388	459	736	1,049
Securities gains (losses)	165	(225)	383	(126)
Other noninterest income	1,292	1,170	2,218	2,102
Total noninterest income	14,756	14,501	28,438	29,466
Noninterest expense:
Officer salaries and employee benefits	3,574	4,239	7,726	8,121
Other salaries and employee benefits	14,731	14,295	29,487	27,951
Occupancy, net	2,181	2,120	4,483	4,365
Equipment	714	636	1,440	1,245
Data processing	2,383	2,095	4,686	4,296
Bank franchise tax	419	416	838	831
Legal fees	381	348	649	649
Professional fees	531	536	1,079	1,102
Advertising and marketing	704	659	1,524	1,411
FDIC insurance	610	358	1,216	713
Other real estate owned provision and expense	61	43	180	396
Repossession expense	98	131	329	231
Amortization of limited partnership investments	598	747	1,195	1,480
Other noninterest expense	4,040	3,355	8,083	6,546
Total noninterest expense	31,025	29,978	62,915	59,337
Income before income taxes	24,801	25,236	49,393	49,999
Income taxes	5,397	4,965	10,676	10,000
Net income	19,404	20,271	38,717	39,999
Unrealized holding gains (losses) on debt securities available-for-sale:
Unrealized holding gains (losses) arising during the period	(11,828)	(47,222)	12,888	(125,786)
Less: Reclassification adjustments for realized gains included in net income	0	(1)	4	(1)
Tax expense (benefit)	(2,951)	(12,277)	5,046	(32,704)
Other comprehensive income (loss), net of tax	(8,877)	(34,944)	7,838	(93,081)
Comprehensive income (loss)	$ 10,527	$ (14,673)	$ 46,555	$ (53,082)
Basic earnings per share (in dollars per share)	$ 1.09	$ 1.14	$ 2.17	$ 2.24
Diluted earnings per share (in dollars per share)	$ 1.08	$ 1.14	$ 2.16	$ 2.24
Weighted average shares outstanding-basic (in shares)	17,884	17,835	17,877	17,827
Weighted average shares outstanding-diluted (in shares)	17,890	17,843	17,885	17,838

XML

Consolidated Statements of Changes in Shareholders' Equity - USD ($) $ in Thousands	Common Stock [Member]	Capital Surplus [Member]	Retained Earnings [Member]	Accumulated Other Comprehensive Income (Loss), Net of Tax [Member]	Total
Balance at Dec. 31, 2021	$ 89,215	$ 227,085	$ 386,750	$ (4,848)	$ 698,202
Balance (in shares) at Dec. 31, 2021	17,843,081
Increase (Decrease) in Stockholders' Equity [Roll forward]
Net income			39,999		39,999
Other comprehensive income (loss)				(93,081)	(93,081)
Cash dividends declared			(14,265)		(14,265)
Issuance of common stock	$ 193	306			499
Issuance of common stock (in shares)	38,566
Issuance of restricted stock	$ 202	(202)			0
Issuance of restricted stock (in shares)	40,438
Vesting of restricted stock	$ (135)	135			0
Vesting of restricted stock (in shares)	(26,904)
Stock-based compensation		696			696
Balance at Jun. 30, 2022	$ 89,475	228,020	412,484	(97,929)	632,050
Balance (in shares) at Jun. 30, 2022	17,895,181
Balance at Mar. 31, 2022	$ 89,420	227,589	399,347	(62,985)	653,371
Balance (in shares) at Mar. 31, 2022	17,884,106
Increase (Decrease) in Stockholders' Equity [Roll forward]
Net income			20,271		20,271
Other comprehensive income (loss)				(34,944)	(34,944)
Cash dividends declared			(7,134)		(7,134)
Issuance of common stock	$ 30	221			251
Issuance of common stock (in shares)	6,075
Issuance of restricted stock	$ 25	(25)			0
Issuance of restricted stock (in shares)	5,000
Stock-based compensation		235			235
Balance at Jun. 30, 2022	$ 89,475	228,020	412,484	(97,929)	632,050
Balance (in shares) at Jun. 30, 2022	17,895,181
Balance at Dec. 31, 2022	$ 89,591	229,012	438,596	(129,152)	$ 628,047
Balance (in shares) at Dec. 31, 2022	17,918,280				17,918,280
Increase (Decrease) in Stockholders' Equity [Roll forward]
Net income			38,717		$ 38,717
Other comprehensive income (loss)				7,838	7,838
Cash dividends declared			(15,735)		(15,735)
Issuance of common stock	$ 174	384			558
Issuance of common stock (in shares)	34,722
Issuance of restricted stock	$ 264	(264)			0
Issuance of restricted stock (in shares)	52,865
Vesting of restricted stock	$ (107)	107			0
Vesting of restricted stock (in shares)	(21,377)
Forfeiture of restricted stock	$ (4)
Forfeiture of restricted stock		4			0
Forfeiture of restricted stock (in shares)	(790)
Stock-based compensation		700			700
Balance at Jun. 30, 2023	$ 89,918	229,943	461,578	(121,314)	$ 660,125
Balance (in shares) at Jun. 30, 2023	17,983,700				17,983,700
Balance at Mar. 31, 2023	$ 89,881	229,333	450,044	(112,437)	$ 656,821
Balance (in shares) at Mar. 31, 2023	17,976,345
Increase (Decrease) in Stockholders' Equity [Roll forward]
Net income			19,404		19,404
Other comprehensive income (loss)				(8,877)	(8,877)
Cash dividends declared			(7,870)		(7,870)
Issuance of common stock	$ 43	237			280
Issuance of common stock (in shares)	8,604
Vesting of restricted stock	$ (6)	6			0
Vesting of restricted stock (in shares)	(1,249)
Stock-based compensation		367			367
Balance at Jun. 30, 2023	$ 89,918	$ 229,943	$ 461,578	$ (121,314)	$ 660,125
Balance (in shares) at Jun. 30, 2023	17,983,700				17,983,700

XML

Consolidated Statements of Changes in Shareholders' Equity (Parenthetical) - $ / shares	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Increase (Decrease) in Stockholders' Equity [Roll forward]
Dividends declared per share (in dollars per share)	$ 0.44	$ 0.4	$ 0.88	$ 0.8

XML

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022	Dec. 31, 2022
Cash flows from operating activities:
Net income	$ 19,404	$ 20,271	$ 38,717	$ 39,999
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization			2,561	2,560
Deferred taxes			242	306
Stock-based compensation			788	742
Provision for credit losses	2,009	77	3,125	952	$ 4,905
Write-downs of other real estate owned and other repossessed assets			106	269
Gains on sale of mortgage loans held for sale	(115)	(519)	(236)	(1,116)
Securities (gains)/losses		1	(4)	1
Fair value adjustments in equity securities	(165)	224	(379)	125
Gains on sale of assets, net			(325)	(43)
Proceeds from sale of mortgage loans held for sale			9,098	49,301
Funding of mortgage loans held for sale			(8,991)	(46,489)
Amortization of securities premiums and discounts, net			1,454	3,341
Change in cash surrender value of bank owned life insurance			(1,029)	(878)
Changes in lease liabilities			(678)	(894)
Mortgage servicing rights:
Fair value adjustments			334	(994)
New servicing assets created			(96)	(452)
Changes in:
Accrued interest receivable			(665)	(386)
Other assets			(1,421)	(154)
Accrued interest payable			3,387	847
Other liabilities			(5,364)	(855)
Net cash provided by operating activities			40,624	46,182
Securities available-for-sale (AFS):
Purchase of AFS securities			(8,820)	(178,054)
Proceeds from sales of AFS securities			18,561	0
Proceeds from prepayments, calls, and maturities of AFS securities			56,666	102,230
Change in loans, net			(220,647)	(149,504)
Purchase of premises and equipment			(2,081)	(2,262)
Proceeds from sale and retirement of premises and equipment			296	0
Proceeds from sale of stock by Federal Home Loan Bank			131	0
Proceeds from sale of other real estate owned and repossessed assets			739	888
Additional investment in other real estate owned and repossessed assets			(40)	(73)
Proceeds from settlement of bank owned life insurance			0	1
Net cash used in investing activities			(155,195)	(226,774)
Cash flows from financing activities:
Change in deposits, net			90,517	128,636
Change in repurchase agreements and federal funds purchased, net			13,589	(32,355)
Proceeds from Federal Home Loan Bank advances			100,000	20,000
Payments on advances from Federal Home Loan Bank			(100,010)	(20,010)
Payment of finance lease liabilities			0	(12)
Proceeds from long-term debt/other borrowings			6,563	0
Repayment of long-term debt/other borrowings			(54)	0
Issuance of common stock			558	499
Dividends paid			(15,733)	(14,256)
Net cash provided by financing activities			95,430	82,502
Net decrease in cash and cash equivalents			(19,141)	(98,090)
Cash and cash equivalents at beginning of period			128,686	311,756	311,756
Cash and cash equivalents at end of period	$ 109,545	$ 213,666	109,545	213,666	$ 128,686
Supplemental disclosures:
Income taxes paid			12,308	8,710
Interest paid			35,440	7,210
Non-cash activities:
Loans to facilitate the sale of other real estate owned and repossessed assets			1,022	935
Common stock dividends accrued, paid in subsequent quarter			281	257
Real estate acquired in settlement of loans			175	444
Right-of-use assets obtained in exchange for new operating lease liabilities			$ 364	$ 405

XML

Summary of Significant Accounting Policies

6 Months Ended

Jun. 30, 2023

Summary of Significant Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Note 1 - Summary of Significant Accounting Policies

In the opinion of management, the unaudited condensed consolidated financial statements include all adjustments (which consist of normal recurring adjustments) necessary, to present fairly the condensed consolidated financial position as of June 30, 2023, the results of operations, other comprehensive income (loss), and changes in shareholders’ equity for the three and six months ended June 30, 2023 and 2022 and the cash flows for the six months ended June 30, 2023 and 2022.  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, other comprehensive income (loss), and changes in shareholders’ equity for the three and six months ended June 30, 2023 and 2022 and the cash flows for the six months ended June 30, 2023 and 2022 are not necessarily indicative of the results to be expected for the full year.  The condensed consolidated balance sheet as of December 31, 2022 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, 2022, included in our annual report on Form 10-K.

Principles of Consolidation – The unaudited condensed consolidated financial statements include the accounts of CTBI and its separate and distinct, wholly owned subsidiaries Community Trust Bank, Inc. (“CTB”) and Community Trust and Investment Company.  All significant intercompany transactions have been eliminated in consolidation.

New Accounting Standards –

➢       Facilitation of the Effects of Reference Rate Reform on Financial Reporting – In December 2022, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2022-06, Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848, which extends the period of time preparers can utilize the reference rate reform relief guidance.  The amendments in ASU No. 2022-06 are effective for all entities upon issuance.  In 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional guidance to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting.  The objective of the guidance in Topic 848 is to provide relief during the temporary transition period, so the FASB included a sunset provision within Topic 848 based on expectations of when the London Interbank Offered Rate (“LIBOR”) would cease being published.  The amendments in ASU No. 2020-04 provide optional guidance for a limited time to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting and provide optional expedients and exceptions for applying generally accepted accounting principles (“GAAP”) to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met.  This ASU applies only to contracts and hedging relationships that reference LIBOR or another reference rate expected to be discontinued due to reference rate reform.  The expedients and exceptions provided by the amendments do not apply to contract modifications made and hedging relationships entered into or evaluated after December 31, 2022.  In 2021, the UK Financial Conduct Authority delayed the intended cessation date of certain tenors of USD LIBOR to June 30, 2023. To ensure the relief in Topic 848 covers the period of time during which a significant number of modifications may take place, ASU No. 2022-06 defers the sunset date of Topic 848 from December 31, 2022, to December 31, 2024, after which entities will no longer be permitted to apply the relief in Topic 848.  At this time, we do not anticipate any material adverse impact to our business operation or financial results during the period of transition.

➢       Troubled Debt Restructurings and Vintage Disclosures – In February 2022, the FASB issued ASU 2022-02, Financial Instruments – Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures.  The amendments in this ASU eliminate the accounting guidance for troubled debt restructurings (“TDRs”) by creditors in Subtopic 310-40, Receivables—Troubled Debt Restructurings by Creditors, while enhancing disclosure requirements for certain loan refinancings and restructurings by creditors when a borrower is experiencing financial difficulty.  Specifically, rather than applying the recognition and measurement guidance for TDRs, an entity must apply the loan refinancing and restructuring guidance in paragraphs 310-20-35-9 through 35-11 to determine whether a modification results in a new loan or a continuation of an existing loan.   Additionally, for public business entities, the amendments in this ASU require that an entity disclose current-period gross write-offs by year of origination for financing receivables and net investments in leases within the scope of Subtopic 326-20, Financial Instruments—Credit Losses—Measured at Amortized Cost, in the vintage disclosures required by paragraph 326-20-50-6.  The amendments in the ASU have been implemented and did not have a  significant impact to our consolidated financial statements.

➢       Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions – In June 2022, the FASB issued ASU 2022-03, Fair Value Measurement Topic 820: Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions.  The FASB issued this ASU to (1) clarify the guidance in Topic 820, Fair Value Measurement, when measuring the fair value of an equity security subject to contractual restrictions that prohibit the sale of an equity security, (2) amend a related illustrative example, and (3) introduce new disclosure requirements for equity securities subject to contractual sale restrictions that are measured at fair value in accordance with Topic 820.  The amendments in this ASU clarify that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, is not considered in measuring fair value.  The amendments also clarify that an entity cannot, as a separate unit of account, recognize and measure a contractual sale restriction.  The amendments in this ASU also require the following disclosures for equity securities subject to contractual sale restrictions: (1) the fair value of equity securities subject to contractual sale restrictions reflected in the balance sheet; (2) the nature and remaining duration of the restriction(s); and (3) the circumstances that could cause a lapse in the restriction(s).  For public business entities, the amendments in this ASU are effective for fiscal years beginning after December 15, 2023, and interim periods within those fiscal years.  Early adoption is permitted for both interim and annual financial statements that have not yet been issued or made available for issuance. We do not anticipate a significant impact to our consolidated financial statements.

            ➢         FASB Improves the Accounting for Investments in Tax Credit Structures – The FASB issued, ASU No. 2023-02, Investments—Equity Method and Joint Ventures (Topic 323): Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method, which is intended to improve the accounting and disclosures for investments in tax credit structures. This ASU is a consensus of the FASB’s Emerging Issues Task Force (EITF).  This ASU allows reporting entities to elect to account for qualifying tax equity investments using the proportional amortization method, regardless of the program giving rise to the related income tax credits. This ASU responds to stakeholder feedback that the proportional amortization method provides investors and other allocators of capital with a better understanding of the returns from investments that are made primarily for the purpose of receiving income tax credits and other income tax benefits.  Reporting entities were previously permitted to apply the proportional amortization method only to qualifying tax equity investments in low-income housing tax credit (“LIHTC”) structures. In recent years, stakeholders asked the FASB to extend the application of the proportional amortization method to qualifying tax equity investments that generate tax credits through other programs, which resulted in the EITF addressing this issue.  For public business entities, the amendments are effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2024, including interim periods within those fiscal years. Early adoption is permitted for all entities in any interim period; however, we do not plan to early adopt. We do not anticipate a significant impact to our consolidated financial statements.

Significant Accounting Policies –

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 our 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 significant accounting policies:

➢        Investments – Management determines the classification of securities at purchase.  We classify debt securities into held-to-maturity, trading, or available-for-sale categories.  Held-to-maturity (“HTM”) securities are those which we have the positive intent and ability to hold to maturity and are reported at amortized cost.  In accordance with FASB Accounting Standards Codification (“ASC”) 320, Investments – Debt Securities, investments in debt securities that are not classified as held-to-maturity 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 HTM securities) shall be classified as available-for-sale (“AFS”) securities.

We do not have any securities that are classified as trading securities.  AFS 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.

For AFS debt securities in an unrealized loss position, we evaluate the securities to determine whether the decline in the fair value below the amortized cost basis (impairment) is due to credit-related factors or non-credit related factors.  Any impairment that is not credit-related is recognized in accumulated other comprehensive income, net of tax.  Credit-related impairment is recognized as an allowance for credit losses (“ACL”) for AFS debt securities on the balance sheet, limited to the amount by which the amortized cost basis exceeds the fair value, with a corresponding adjustment to earnings.  Accrued interest receivable on AFS debt securities is excluded from the estimate of credit losses.  Both the ACL for AFS debt securities and the adjustment to net income may be reversed if conditions change.  However, if we intend to sell an impaired AFS debt security or more likely than not will be required to sell such a security before recovering its amortized cost basis, the entire impairment amount would be recognized in earnings with a corresponding adjustment to the security’s amortized cost basis.  Because the security’s amortized cost basis is adjusted to fair value, there is no ACL for AFS debt securities in this situation.

In evaluating AFS debt securities in unrealized loss positions for impairment and the criteria regarding its intent or requirement to sell such securities, we consider the extent to which fair value is less than amortized cost, whether the securities are issued by the federal government or its agencies, whether downgrades by bond rating agencies have occurred, and the results of reviews of the issuers’ financial condition, among other factors.  There were no credit related factors underlying unrealized losses on AFS debt securities at June 30, 2023 and December 31, 2022, therefore, no ACL for AFS securities was recorded.

Changes in the ACL for AFS debt securities are recorded as expense.  Losses are charged against the ACL for AFS debt securities when management believes the uncollectability of an AFS debt security is confirmed or when either of the criteria regarding intent or requirement to sell is met.

Gains or losses on disposition of debt securities are computed by specific identification for those securities.  Interest and dividend income, adjusted by amortization of purchase premium or discount, is included in earnings.

HTM securities are subject to an allowance for lifetime expected credit losses, determined by adjusting historical loss information for current conditions and reasonable and supportable forecasts.  The forward-looking evaluation of lifetime expected losses will be performed on a pooled basis for debt securities that share similar risk characteristics.  These allowances for expected losses must be made by the holder of the HTM debt security when the security is purchased.  At June 30, 2023 and 2022, CTBI held no securities designated as HTM.

CTBI accounts for equity securities in accordance with ASC 321, Investments – Equity Securities. ASC 321 requires equity investments (except those accounted for under the equity method and those that result in the consolidation of the investee) to be measured at fair value, with changes in fair values recognized in net income.

Equity securities with a readily determinable fair value are required to be measured at fair value, with changes in fair value recognized in net income.  Equity securities without a readily determinable fair value are carried at cost, less any impairment, if any, plus or minus changes resulting from observable price changes for identical or similar investments.  As permitted by ASC 321-10-35-2, CTBI can make an irrevocable election to subsequently measure an equity security without a readily determinable fair value, and all identical or similar investments of the same issuer, including future purchases of identical or similar investments of the same issuer, at fair value.  CTBI has made this election for our Visa Class B equity securities.  The fair value of these securities was determined by a third party service provider using Level 3 inputs as defined in ASC 820, Fair Value Measurement, and changes in fair value are recognized in income.

➢        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 credit losses, and unamortized deferred fees or costs and premiums.  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. With the implementation of ASU 2022-02 described above in the New Accountings Standards, TDRs have been eliminated while enhanced disclosure requirements have been implemented for certain loan modifications when a borrower is experiencing financial difficulty.

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, or commitments as a yield adjustment.

➢        Allowance for Credit Losses – CTBI accounts for the allowance for credit losses under ASC 326. CTBI measures expected credit losses of financial assets on a collective (pool) basis using loss-rate methods when the financial assets share similar risk characteristics. Loans that do not share risk characteristics are evaluated on an individual basis. Regardless of an initial measurement method, once it is determined that foreclosure is probable, the allowance for credit losses is measured based on the fair value of the collateral as of the measurement date. As a practical expedient, the fair value of the collateral may be used for a loan when determining the allowance for credit losses for which the repayment is expected to be provided substantially through the operation or sale of the collateral when the borrower is experiencing financial difficulty. The fair value shall be adjusted for selling costs when foreclosure is probable. For collateral-dependent financial assets, the credit loss expected may be zero if the fair value less costs to sell exceed the amortized cost of the loan. Loans shall not be included in both collective assessments and individual assessments.

In the event that collection of principal becomes uncertain, CTBI has policies in place to reverse accrued interest in a timely manner. Therefore, CTBI elected  ASU 2019-04 which allows that accrued interest would continue to be presented separately and not part of the amortized cost of the loan. The methodology used by CTBI is developed using the current loan balance, which is then compared to amortized cost balances to analyze the impact. The difference in amortized cost basis versus consideration of loan balances impacts the allowance for credit losses calculation by 1 basis point and is considered immaterial. The primary difference is for indirect lending premiums.

We maintain an ACL at a level that is appropriate to cover estimated credit losses on individually evaluated loans, as well as estimated credit losses inherent in the remainder of the loan and lease portfolio.  Credit losses are charged and recoveries are credited to the ACL.

We utilize an internal risk grading system for commercial credits. Those credits that meet the following criteria are subject to individual evaluation: the loan has an outstanding bank share balance of $1 million or greater and has a criticized risk rating and meets one of the following criteria: (i) is in nonaccrual status, (ii) the borrower is experiencing financial difficulty with significant payment delay, or (iii) is 90 days or more past due. The borrower’s cash flow, adequacy of collateral coverage, and other options available to CTBI, including legal remedies, are evaluated. 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 loan segments not subject to individual evaluation.

Homogenous loans, such as consumer installment, residential mortgages, and home equity lines are not individually risk graded.  The associated ACL for these loans is measured in pools with similar risk characteristics under ASC 326.

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 nonaccrual and the loan is charged down to the value of the collateral less estimated cost to sell. For commercial loans greater than $1 million that are categorized as individually evaluated based on the criteria listed above, a specific reserve is established if a loss is determined to be possible and then charged-off once it is probable. When the foreclosed collateral has been legally assigned to CTBI, the estimated fair value of the collateral less costs to sell is then transferred to other real estate owned or other repossessed assets, and a charge-off is taken for any remaining balance.  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 (five 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.

Prior to June 30, 2023, loss rate methodologies were used by CTBI.  Weighted average life calculations were completed as a tool to determine the life of CTBI’s various loan segments.  Vintage modeling was used to determine the life of loan losses for consumer and residential real estate loans, and static pool modeling was used to determine the life of loan losses for commercial loan segments.  Historical loss rates for loans were adjusted for significant factors that, in management’s judgment, reflect the impact of any current conditions on loss recognition.  Forecasting factors including unemployment rates and industry specific forecasts for industries in which our total exposure is 5% of capital or greater were also included as factors in the ACL model.

During the quarter ended June 30, 2023, CTBI implemented third party software and the determination was made to utilize discounted cash flow loss rate methodologies for all loan segments.  Within the discount cash flow calculation, an effective yield of the instrument is calculated, net of the impacts of prepayment assumptions, and the instrument expected cash flows, modeled considering probability of default (PD) and segment-specific loss given default (LGD) risk factors, are then discounted at that effective yield to produce an instrument-level net present value (NPV) of expected cash flows.  An allowance for credit loss is established for the difference between the instrument’s NPV and amortized cost basis.  Any changes in NPV between periods is recorded as provision for credit losses.  The modeling of expected prepayment speeds, curtailment rates, and time to recovery are based on historical internal data and adjusted, if necessary, based on the reasonable and supportable forecast of economic conditions.  Management incorporates qualitative factors to loss estimates used to derive CTBI’s total ACL including delinquency trends, current economic conditions and trends, strength of supervision and administration of the loan portfolio, levels of underperforming loans, and underwriting exceptions.  Forecast factors were expanded to include gross domestic product, retail and food service sales, and S&P/Case-Shiller US National Home Price Index, while industry concentrations was added as a qualitative factor.  Management continually reevaluates the other subjective factors included in our ACL analysis.

➢        Goodwill and Core Deposit Intangible – We evaluate total goodwill and core deposit intangible for impairment, based upon ASC 350, Intangibles-Goodwill and Other, using fair value techniques including multiples of price/equity.  Goodwill and core deposit intangible are evaluated for impairment on an annual basis or as other events may warrant.

The balance of goodwill, at $65.5 million, has not changed since January 1, 2015.

➢        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 our consolidated financial statements. During the six months ended June 30, 2023 and 2022, CTBI has not recognized a significant amount of interest expense or penalties in connection with income taxes.

➢        Estimated Credit Losses on Off-Balance Sheet Credit Exposures Recognized as Other Liabilities – CTBI estimates expected credit losses over the contractual period in which it has exposure to credit risk via a contractual obligation to extend credit, unless that obligation is unconditionally cancellable by CTBI.  The allowance for credit losses on off-balance sheet credit exposures recognized in other liabilities, is adjusted as an expense in other non-interest expense. The estimate includes consideration of the likelihood that funding will occur and an estimate of expected credit losses on commitments expected to be funded over their estimated lives.  Estimating credit losses on unfunded commitments requires CTBI to consider the following categories of off-balance sheet credit exposure: unfunded commitments to extend credit, unfunded lines of credit, and standby letters of credit.  Each of these unfunded commitments is then analyzed for a probability of funding to calculate a probable funding amount.  The life of loan loss factor by related portfolio segment from the loan allowance for credit loss calculation is then applied to the probable funding amount to calculate the estimated credit losses on off-balance sheet credit exposures recognized as other liabilities.

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Stock-Based Compensation

6 Months Ended

Jun. 30, 2023

Stock-Based Compensation [Abstract]

Stock-Based Compensation

Note 2 – Stock-Based Compensation

Restricted stock expense for the three and six months ended June 30, 2023 was $411 thousand and $788 thousand, respectively, including $44 thousand and $88 thousand, respectively, in dividends paid for those periods.  Restricted stock expense for the three and six months ended June 30, 2022 was $258 thousand and $742 thousand, respectively, including $24 thousand and $46 thousand, respectively, in dividends paid for those periods.  As of June 30, 2023, there was a total of $3.7 million of unrecognized compensation expense related to restricted stock grants that will be recognized as expense as the awards vest over a weighted average period of 3.4 years. There were no shares of restricted stock granted during the three months ended June 30, 2023, but there were 5,000 shares of restricted stock granted during the three months ended June 30, 2022.  There were 52,865 and 40,438 shares of restricted stock granted during the six months ended June 30, 2023 and 2022, respectively.  The restricted stock was issued pursuant to the terms of CTBI’s 2015 Stock Ownership Incentive Plan. The restrictions on the restricted stock will lapse ratably over four years, except for the 5,000 management retention restricted stock award granted in April 2022 which will vest at the end of five years, subject to such employee’s continued employment.  However, in the event of certain participant employee termination events occurring within 24 months of a change in control of CTBI or the death of the participant, the restrictions will lapse, and in the event of the participant’s disability, the restrictions will lapse on a pro rata basis.  The Compensation Committee will have discretion to review and revise restrictions applicable to a participant’s restricted stock in the event of the participant’s retirement.There were no shares of restricted stock forfeited during the three months ended June 30, 2023, but there were 790 shares of restricted stock forfeited during the six months ended June 30, 2023.  No shares were forfeited during the three and six months ended June 30, 2022.

There was no compensation expense related to stock option grants for the three and six months ended June 30, 2023 and 2022. As of June 30, 2023, there was no unrecognized compensation expense related to unvested stock option awards, as all stock option awards have fully vested.  There were no stock options granted in the first six months of 2023 or 2022.

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Securities

6 Months Ended

Jun. 30, 2023

Securities [Abstract]

Securities

Note 3 – Securities

Debt securities are classified into HTM and AFS categories.  HTM securities are those that CTBI has the positive intent and ability to hold to maturity and are reported at amortized cost.  AFS securities are those that CTBI may decide to sell if needed for liquidity, asset-liability management or other reasons.  AFS securities are reported at fair value, with unrealized gains or losses included as a separate component of equity, net of tax.  As of June 30, 2023 and December 31, 2022, CTBI had no HTM securities.

The amortized cost and fair value of debt securities at June 30, 2023 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	$	400,148	$	143	$	(34,897	)	$	365,394
State and political subdivisions		314,048		2		(54,225	)		259,825
U.S. government sponsored agency mortgage-backed securities		558,964		1		(71,066	)		487,899
Asset-backed securities		89,588		0		(1,453	)		88,135
Total available-for-sale securities	$	1,362,748	$	146	$	(161,641	)	$	1,201,253

The amortized cost and fair value of debt securities at December 31, 2022 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	$	418,579	$	212	$	(36,859	)	$	381,932
State and political subdivisions		326,746		32		(61,676	)		265,102
U.S. government sponsored agency mortgage-backed securities		593,917		1		(73,833	)		520,085
Asset-backed securities		91,363		0		(2,256	)		89,107
Total available-for-sale securities	$	1,430,605	$	245	$	(174,624	)	$	1,256,226

The amortized cost and fair value of debt securities at June 30, 2023 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	$	33,089	$	32,613
Due after one through five years		336,248		305,693
Due after five through ten years		169,173		145,760
Due after ten years		175,686		141,153
U.S. government sponsored agency mortgage-backed securities		558,964		487,899
Asset-backed securities		89,588		88,135
Total debt securities	$	1,362,748	$	1,201,253

During the three months ended June 30, 2023, we had an unrealized gain of $165 thousand from the fair value adjustment of equity securities.  During the three months ended June 30, 2022, we had a net securities loss of $225 thousand, consisting of a pre-tax loss of $1 thousand realized on calls of AFS securities and an unrealized loss of $224 thousand from the fair value adjustment of equity securities.

During the six months ended June 30, 2023, we had a net securities gain of $383 thousand, consisting of a pre-tax gain of $4 thousand realized on sales and calls of AFS securities and an unrealized gain of $379 thousand from the fair value adjustment of equity securities.  During the six months ended June 30, 2022, we had a net securities loss of $126 thousand, consisting of a pre-tax loss of $1 thousand realized on calls of AFS securities and an unrealized loss of $125 thousand from the fair 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 June 30, 2023 were $2.5 million, as a result of a $165 thousand increase in the fair value in the second quarter 2023.  The fair value of equity securities decreased $224 thousand in the second quarter 2022.  No equity securities were sold during the six months ended June 30, 2023 and 2022.

The amortized cost of securities pledged as collateral, to secure public deposits and for other purposes, was $744.4 million at June 30, 2023 and $725.0 million at December 31, 2022.

The amortized cost of securities sold under agreements to repurchase amounted to $342.9 million at June 30, 2023 and $316.9 million at December 31, 2022.

CTBI evaluates its investment portfolio on a quarterly basis for impairment.  The analysis performed as of June 30, 2023 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 June 30, 2023 was 98.7% compared to 97.4% as of December 31, 2022.  The following table provides the amortized cost, gross unrealized losses, and fair value, aggregated by investment category and length of time the individual securities have been in a continuous unrealized loss position as of June 30, 2023 that are not deemed to have credit losses.  As stated above, CTBI had no HTM securities as of June 30, 2023.

Available-for-Sale

(in thousands)	Amortized Cost		Gross Unrealized Losses			Fair Value
Less Than 12 Months
U.S. Treasury and government agencies	$	7,188	$	(10	)	$	7,178
State and political subdivisions		34,386		(1,493	)		32,893
U.S. government sponsored agency mortgage-backed securities		51,640		(1,806	)		49,834
Asset-backed securities		0		0			0
Total <12 months temporarily impaired AFS securities		93,214		(3,309	)		89,905
12 Months or More
U.S. Treasury and government agencies		380,143		(34,887	)		345,256
State and political subdivisions		277,291		(52,732	)		224,559
U.S. government sponsored agency mortgage-backed securities		507,278		(69,260	)		438,018
Asset-backed securities		89,588		(1,453	)		88,135
Total ≥12 months temporarily impaired AFS securities		1,254,300		(158,332	)		1,095,968
Total
U.S. Treasury and government agencies		387,331		(34,897	)		352,434
State and political subdivisions		311,677		(54,225	)		257,452
U.S. government sponsored agency mortgage-backed securities		558,918		(71,066	)		487,852
Asset-backed securities		89,588		(1,453	)		88,135
Total temporarily impaired AFS securities	$	1,347,514	$	(161,641	)	$	1,185,873

The analysis performed as of December 31, 2022 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 value, aggregated by investment category and length of time the individual securities have been in a continuous unrealized loss position as of December 31, 2022 that are not deemed to be other-than-temporarily impaired.  As stated above, CTBI had no HTM securities as of December 31, 2022.

Available-for-Sale

(in thousands)	Amortized Cost		Gross Unrealized Losses			Fair Value
Less Than 12 Months
U.S. Treasury and government agencies	$	144,305	$	(6,953	)	$	137,352
State and political subdivisions		94,277		(6,257	)		88,020
U.S. government sponsored agency mortgage-backed securities		139,314		(6,883	)		132,431
Asset-backed securities		38,882		(1,231	)		37,651
Total <12 months temporarily impaired AFS securities		416,778		(21,324	)		395,454
12 Months or More
U.S. Treasury and government agencies		249,424		(29,906	)		219,518
State and political subdivisions		225,019		(55,419	)		169,600
U.S. government sponsored agency mortgage-backed securities		454,357		(66,950	)		387,407
Asset-backed securities		52,480		(1,025	)		51,455
Total ≥12 months temporarily impaired AFS securities		981,280		(153,300	)		827,980
Total
U.S. Treasury and government agencies		393,729		(36,859	)		356,870
State and political subdivisions		319,296		(61,676	)		257,620
U.S. government sponsored agency mortgage-backed securities		593,671		(73,833	)		519,838
Asset-backed securities		91,362		(2,256	)		89,106
Total temporarily impaired AFS securities	$	1,398,058	$	(174,624	)	$	1,223,434

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 that we will be required to sell the investments before recovery of their amortized cost.

Asset-Backed Securities

The unrealized losses in asset-backed 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.

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Loans

6 Months Ended

Jun. 30, 2023

Loans [Abstract]

Loans

Note 4 – Loans

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

(in thousands)	June 30 2023		December 31 2022
Hotel/motel	$	372,981	$	343,640
Commercial real estate residential		393,309		372,914
Commercial real estate nonresidential		787,598		762,349
Dealer floorplans		76,903		77,533
Commercial other		319,838		312,422
Commercial loans		1,950,629		1,868,858
Real estate mortgage		883,104		824,996
Home equity lines		132,033		120,540
Residential loans		1,015,137		945,536
Consumer direct		157,848		157,504
Consumer indirect		806,081		737,392
Consumer loans		963,929		894,896
Loans and lease financing	$	3,929,695	$	3,709,290

The loan portfolios presented above are net of unearned fees and unamortized premiums.  Unearned fees included above totaled $1.0 million as of June 30, 2023 and as of December 31, 2022, while the unamortized premiums on the indirect lending portfolio totaled $30.9 million as of June 30, 2023 and $28.5 million as of December 31, 2022.

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

Hotel/motel loans are a significant concentration for CTBI, representing approximately 9.5% of total loans. This industry has unique risk characteristics as it is highly susceptible to changes in the domestic and global economic environments, which can cause the industry to experience substantial volatility. Additionally, any hotel/motel construction loans would be included in this segment as CTBI’s construction loans are primarily completed as one loan going from construction to permanent financing. 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.

Commercial real estate residential loans are commercial purpose construction and permanent financed loans for commercial purpose 1-4 family/multi-family properties. 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.

Commercial real estate nonresidential loans are secured by nonfarm, nonresidential 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. Construction for commercial real estate nonresidential loans are also included in this segment as these loans are generally one loan for construction to permanent financing.

Dealer floorplans consist of loans to dealerships to finance inventory and are collateralized under a blanket security agreement and without specific liens on individual units.  This risk is mitigated by the use of periodic inventory audits.  These audits are performed monthly and follow up is required on any out of compliance items identified.  These audits are subject to increasing frequency when fact patterns suggest more scrutiny is required.

 Commercial other loans consist of agricultural loans, receivable financing, 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 equipment, or other assets, although such loans may be uncollateralized but guaranteed.

Residential real estate loans are a mixture of fixed rate and adjustable rate first and second lien residential mortgage loans and also include real estate construction loans which are typically for owner-occupied properties.  The terms of the real estate construction loans are generally short-term with permanent financing upon completion.  As a policy, CTBI holds adjustable rate loans and sells the majority of our 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 primarily revolving adjustable rate credit lines secured by real property.

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

Consumer indirect loans are primarily fixed rate consumer 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 $0.2 million at June 30, 2023 and $0.1 million at December 31, 2022.

For periods ended June 30, 2022 and December 31, 2022, CTBI derived our ACL balance by using vintage modeling for the consumer and residential portfolios.  Static pool models incorporating losses by credit risk rating were developed to determine credit loss balances for the commercial loan segments.  Qualitative loss factors were based on CTBI’s judgment of delinquency trends, level of nonperforming loans, trend in loan losses, supervision and administration, quality control exceptions, and reasonable and supportable forecasts based on unemployment rates and industry concentrations.  CTBI determined that twelve months represented a reasonable and supportable forecast period and reverted back to a historical loss rate immediately.  CTBI leveraged economic projections from a reputable and independent third party to form its loss driver forecasts over the twelve-month forecast period.  Other internal and external indicators of economic forecasts were also considered by CTBI when developing the forecast metrics.  CTBI also had an inherent model risk allocation included in our ACL calculation to allow for certain known model limitations as well as other potential risks not quantified elsewhere.  One limitation was the inability to completely identify revolving line of credit within the commercial other segment.

During the quarter ended June 30, 2023, CTBI implemented third party software for its ACL calculations.  During the implementation process, discounted cash flow modeling was chosen for all loan segments.  The primary reasons that contributed to this decision were:  Discounted cash flow (“DCF”) models allow for the effective incorporation of a reasonable and supportable forecast in a directionally consistent and objective manner; the analysis aligns well with other calculations outside of the ACL estimation which will mitigate model risk in other areas; and peer data is available for certain inputs if first -party data is not available or meaningful.  This change in modeling resulted in a shift in our reserve estimates as of June 30, 2023 as presented below:

(in thousands)	ACL Software June 30, 2023		CTBI Internal ACL Model June 30, 2023		Change in Allocation
Hotel/motel	$	5,192	$	6,038	$	(846	)
Commercial real estate residential		3,749		4,669		(920	)
Commercial real estate nonresidential		7,797		8,794		(997	)
Dealer floorplans		1,157		1,719		(562	)
Commercial other		6,176		4,547		1,629
Commercial loans reserve allocation		24,071		25,767		(1,696	)
Real estate mortgage		7,884		8,443		(559	)
Home equity lines		1,108		1,065		43
Residential loans reserve allocation		8,992		9,508		(516	)
Consumer direct		2,563		1,673		890
Consumer indirect		12,392		10,959		1,433
Consumer loans reserve allocation		14,955		12,632		2,323
Loans and lease financing allowance for credit loss	$	48,018		47,907	$	111

This change in reserve estimates  is related to life of loan and how it functions in a cash flow methodology versus the loss rate methodology previously used as consumer loans generally have longer lives than commercial loans.  Although commercial loans may estimate more probability of default/loss given default compared to consumer loans, their shorter exposures will yield lower reserves.  Additionally, there was a change in how some of the qualitative factors were applied using the new software with a switch from a geographical approach to a loan segment approach.

The following tables present the balance in the ACL for the periods ended June 30, 2023, December 31, 2022, and June 30, 2022:

	Three Months Ended June 30, 2023
(in thousands)	Beginning Balance		Provision Charged to Expense			Losses Charged Off			Recoveries		Ending Balance
ACL
Hotel/motel	$	5,287	$	(95	)	$	0		$	0	$	5,192
Commercial real estate residential		5,157		(1,384	)		(28	)		4		3,749
Commercial real estate nonresidential		9,010		(1,393	)		(9	)		189		7,797
Dealer floorplans		1,694		(537	)		0			0		1,157
Commercial other		4,782		2,387			(1,073	)		80		6,176
Real estate mortgage		7,917		10			(55	)		12		7,884
Home equity		1,044		76			(13	)		1		1,108
Consumer direct		1,746		807			(82	)		92		2,563
Consumer indirect		10,046		2,138			(693	)		901		12,392
Total	$	46,683	$	2,009		$	(1,953	)	$	1,279	$	48,018

	Six Months Ended June 30, 2023
(in thousands)	Beginning Balance		Provision Charged to Expense			Losses Charged Off			Recoveries		Ending Balance
ACL
Hotel/motel	$	5,171	$	21		$	0		$	0	$	5,192
Commercial real estate residential		4,894		(1,198	)		(28	)		81		3,749
Commercial real estate nonresidential		9,419		(1,946	)		(9	)		333		7,797
Dealer floorplans		1,776		(619	)		0			0		1,157
Commercial other		5,285		1,971			(1,260	)		180		6,176
Real estate mortgage		7,932		31			(95	)		16		7,884
Home equity		1,106		12			(13	)		3		1,108
Consumer direct		1,694		912			(238	)		195		2,563
Consumer indirect		8,704		3,941			(2,075	)		1,822		12,392
Total	$	45,981	$	3,125		$	(3,718	)	$	2,630	$	48,018

	Year Ended December 31, 2022
(in thousands)	Beginning Balance		Provision Charged to Expense			Losses Charged Off			Recoveries		Ending Balance
ACL
Hotel/motel	$	5,080	$	307		$	(216	)	$	0	$	5,171
Commercial real estate residential		3,986		951			(92	)		49		4,894
Commercial real estate nonresidential		8,884		(154	)		(46	)		735		9,419
Dealer floorplans		1,436		340			0			0		1,776
Commercial other		4,422		947			(1,082	)		998		5,285
Real estate mortgage		7,637		466			(223	)		52		7,932
Home equity		866		257			(37	)		20		1,106
Consumer direct		1,951		(210	)		(609	)		562		1,694
Consumer indirect		7,494		2,001			(3,041	)		2,250		8,704
Total	$	41,756	$	4,905		$	(5,346	)	$	4,666	$	45,981

	Three Months Ended June 30, 2022
(in thousands)	Beginning Balance		Provision Charged to Expense			Losses Charged Off			Recoveries		Ending Balance
ACL
Hotel/motel	$	4,711	$	133		$	0		$	0	$	4,844
Commercial real estate residential		4,070		124			0			6		4,200
Commercial real estate nonresidential		9,169		(223	)		0			22		8,968
Dealer floorplans		1,519		(42	)		0			0		1,477
Commercial other		4,844		(285	)		(187	)		101		4,473
Real estate mortgage		7,662		586			(84	)		15		8,179
Home equity		819		71			(5	)		2		887
Consumer direct		1,787		(65	)		(175	)		74		1,621
Consumer indirect		7,728		(222	)		(377	)		566		7,695
Total	$	42,309	$	77		$	(828	)	$	786	$	42,344

	Six Months Ended June 30, 2022
(in thousands)	Beginning Balance		Provision Charged to Expense			Losses Charged Off			Recoveries		Ending Balance
ACL
Hotel/motel	$	5,080	$	(20	)	$	(216	)	$	0	$	4,844
Commercial real estate residential		3,986		234			(31	)		11		4,200
Commercial real estate nonresidential		8,884		(49	)		0			133		8,968
Dealer floorplans		1,436		41			0			0		1,477
Commercial other		4,422		193			(344	)		202		4,473
Real estate mortgage		7,637		683			(177	)		36		8,179
Home equity		866		38			(24	)		7		887
Consumer direct		1,951		(245	)		(345	)		260		1,621
Consumer indirect		7,494		77			(1,011	)		1,135		7,695
Total	$	41,756	$	952		$	(2,148	)	$	1,784	$	42,344

Using the ACL software, forecasts were expanded to include gross domestic product (GDP), retail sales and housing price index considerations.  CTBI leverages economic projections from the Federal Open Market Committee to obtain various forecasts for unemployment rate and gross domestic product, the PNC forecast for the Case-Shiller National Home Price Index, and the Wells Fargo forecast for the Advanced Retail Sales.  CTBI has elected to forecast the first four quarters of the credit loss estimate and revert to a long-run average of each considered economic factor as permitted in ASC 326-20-30-9 over four quarters.

All periods during the reasonable and supportable forecast period are utilizing a forecasted probability of default.  During the ACL software implementation, loss driver analysis was performed during which regression models were built relating default rates of the various segments to the economic factors noted above.  Historical loss data for both CTBI and segment-specific selected peers was incorporated from FFIEC call report data.  For loss given default, the Frye-Jacobs LGD estimation technique was utilized in the ACL software provided a risk curve that most approximates the asset class under consideration.  Management elected to evaluate internal prepayment experience over a trailing timeframe to determine the appropriate prepayment and curtailment rates to be used in the credit loss estimate.

CTBI continues to use management judgement for qualitative loss factors such as delinquency trends, supervision and administration, quality control exceptions, collateral values, and industry concentrations, although these factors are applied differently in the ACL software.  The software allows management to approve a “worst case” scenario or a maximum loss rate for each segment.  Qualitative dollars available for allocation then become the difference between the worst case and the ACL reserve estimate.  Each factor is then given a risk weighting that is applied to determine a basis point allocation.  The previous model only allowed for a specific basis point allocation determined by management.  In addition to these factors, management has added risk factors related to changes in the nature and volume of the portfolio and terms of loans and changes in the experience, depth, and ability of lending management.  The previous significant event factor has been expanded to reflect changes in international, national, regional and local conditions, as well as the effect of other external factors as noted below.  The previous factors for inherent model risk and levels of nonperforming loans were not incorporated into the ACL software as separate qualitative factors.   The revised qualitative loss factors are as follows:

• Changes in delinquency trends by loan segment

• Changes in international, national, regional, and local conditions

• The effect of other external factors (i.e. competition, legal and regulatory requirements) on the level of estimated credit losses

• The existence and effect of any concentrations of credit and changes in the levels of such concentrations

• A supervision and administration allocation based on CTBI’s loan review process

• Exceptions in lending policies and procedures as measured by quarterly loan portfolio exceptions reports

• Changes in the nature and volume of the portfolio and terms of loans

• Changes in the experience, depth, and ability of lending management

Economic forecast factors utilized in the estimate improved quarter over quarter and the slight reduction in reserve requirements from 1.24% to 1.22% is reflective of this improvement.  Management continues to note the continued impact of global uncertainty, the current rate of inflation, the significant rising rate environment, and the fact that there is no immediate end foreseen, and these conditions are now part of qualitative factors noted above.  As in previous quarters an allocation was made for delinquency trends, industry concentrations, supervisory and administration, loan exceptions, and collateral values.

Our provision for credit losses for the quarter increased $0.9 million from prior quarter and $1.9 million from prior year same quarter.  Our reserve coverage (allowance for credit losses to nonperforming loans) at June 30, 2023 was 408.9%, compared to 382.3% at March 31, 2023 and 305.9% at June 30, 2022.  Our credit loss reserve as a percentage of total loans outstanding at June 30, 2023 was 1.22% compared to 1.24% at March 31, 2023 and 1.19% at June 30, 2022.

Refer to Note 1 to the condensed consolidated financial statements for further information regarding our nonaccrual policy.  Nonaccrual loans and loans 90 days past due and still accruing segregated by class of loans for both June 30, 2023 and December 31, 2022 were as follows:

	June 30, 2023
(in thousands)	Nonaccrual Loans with No ACL		Nonaccrual Loans with ACL		90+ and Still Accruing		Total Nonperforming Loans
Hotel/motel	$	0	$	0	$	0	$	0
Commercial real estate residential		0		322		712		1,034
Commercial real estate nonresidential		0		982		300		1,282
Commercial other		0		753		277		1,030
Total commercial loans		0		2,057		1,289		3,346
Real estate mortgage		0		3,093		4,206		7,299
Home equity lines		0		195		459		654
Total residential loans		0		3,288		4,665		7,953
Consumer direct		0		0		6		6
Consumer indirect		0		0		439		439
Total consumer loans		0		0		445		445
Loans and lease financing	$	0	$	5,345	$	6,399	$	11,744

	December 31, 2022
(in thousands)	Nonaccrual Loans with No ACL		Nonaccrual Loans with ACL		90+ and Still Accruing		Total Nonperforming Loans
Hotel/motel	$	0	$	0	$	0	$	0
Commercial real estate residential		0		355		258		613
Commercial real estate nonresidential		0		1,116		1,947		3,063
Commercial other		0		982		369		1,351
Total commercial loans		0		2,453		2,574		5,027
Real estate mortgage		0		4,069		4,929		8,998
Home equity lines		0		291		487		778
Total residential loans		0		4,360		5,416		9,776
Consumer direct		0		0		41		41
Consumer indirect		0		0		465		465
Total consumer loans		0		0		506		506
Loans and lease financing	$	0	$	6,813	$	8,496	$	15,309

Discussion of the Nonaccrual Policy

The accrual of interest income on loans 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 the collection of interest is doubtful.  Cash payments received on nonaccrual loans generally are applied against principal, and interest income is only recorded once principal recovery is reasonably assured.  Any loans greater than 90 days past due must be well secured and in the process of collection to continue accruing interest.  See Note 1 to the condensed consolidated financial statements for further discussion on our nonaccrual policy.

The following tables present CTBI’s loan portfolio aging analysis, segregated by class, as of June 30, 2023 and December 31, 2022 (includes loans 90 days past due and still accruing as well):

	June 30, 2023
(in thousands)	30-59 Days Past Due		60-89 Days Past Due		90+ Days Past Due		Total Past Due		Current		Total Loans
Hotel/motel	$	0	$	0	$	0	$	0	$	372,981	$	372,981
Commercial real estate residential		152		279		1,000		1,431		391,878		393,309
Commercial real estate nonresidential		1,101		110		940		2,151		785,447		787,598
Dealer floorplans		0		0		0		0		76,903		76,903
Commercial other		1,062		330		694		2,086		317,752		319,838
Total commercial loans		2,315		719		2,634		5,668		1,944,961		1,950,629
Real estate mortgage		1,440		2,528		6,220		10,188		872,916		883,104
Home equity lines		733		435		490		1,658		130,375		132,033
Total residential loans		2,173		2,963		6,710		11,846		1,003,291		1,015,137
Consumer direct		557		95		6		658		157,190		157,848
Consumer indirect		3,147		865		439		4,451		801,630		806,081
Total consumer loans		3,704		960		445		5,109		958,820		963,929
Loans and lease financing	$	8,192	$	4,642	$	9,789	$	22,623	$	3,907,072	$	3,929,695

	December 31, 2022
(in thousands)	30-59 Days Past Due		60-89 Days Past Due		90+ Days Past Due		Total Past Due		Current		Total Loans
Hotel/motel	$	0	$	0	$	0	$	0	$	343,640	$	343,640
Commercial real estate residential		602		225		574		1,401		371,513		372,914
Commercial real estate nonresidential		2,549		395		2,611		5,555		756,794		762,349
Dealer floorplans		0		0		0		0		77,533		77,533
Commercial other		1,029		850		496		2,375		310,047		312,422
Total commercial loans		4,180		1,470		3,681		9,331		1,859,527		1,868,858
Real estate mortgage		869		3,402		7,067		11,338		813,658		824,996
Home equity lines		786		44		740		1,570		118,970		120,540
Total residential loans		1,655		3,446		7,807		12,908		932,628		945,536
Consumer direct		555		126		41		722		156,782		157,504
Consumer indirect		4,407		764		465		5,636		731,756		737,392
Total consumer loans		4,962		890		506		6,358		888,538		894,896
Loans and lease financing	$	10,797	$	5,806	$	11,994	$	28,597	$	3,680,693	$	3,709,290

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

Hotel/motel loans are a significant concentration for CTBI, representing approximately 9.5% of total loans.  This industry has unique risk characteristics as it is highly susceptible to changes in the domestic and global economic environments, which can cause the industry to experience substantial volatility.  These loans are viewed primarily as cash flow loans and secondarily as loans secured by real estate.  Hotel/motel 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.  Management monitors and evaluates all commercial real estate loans based on collateral and risk grade criteria.  Commercial construction loans generally are made to customers for the purpose of building income-producing properties, and any hotel/motel construction loan would be included in this segment.  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.

Commercial real estate residential loans are commercial purpose construction and permanent financed loans for commercial purpose 1-4 family/multi-family properties.  All commercial real estate loans are viewed primarily as cash flow loans and secondarily as loans secured by real estate.  Management monitors and evaluates all commercial real estate loans based on collateral and risk grade criteria.  Commercial residential 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.

Commercial real estate nonresidential loans are secured by nonfarm, nonresidential properties, farmland, and other commercial real estate.  Construction for commercial real estate nonresidential loans are also included in this segment as these loans are generally one loan for construction to permanent financing.  All commercial real estate loans are viewed primarily as cash flow loans and secondarily as loans secured by real estate.  Management monitors and evaluates all commercial real estate loans based on collateral and risk grade criteria.  Commercial nonresidential 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.

Dealer floorplans are segmented separately as they are a unique product with unique risk factors. CTBI maintains strict processing procedures over our floorplan product with any exceptions requested by a loan officer approved by the appropriate loan committee and the floorplan manager.

Commercial other 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 our customers.  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.

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 is generally responsible for purchasing/funding consumer contracts with new and used automobile dealers.  Dealer loan applications 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 borrowers, and on the collateral value.  The dealers may have limited recourse agreements with CTB.

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 tables present the credit risk profile of CTBI’s commercial loan portfolio based on rating category and payment activity, as well as gross charge-offs year to date, if any, segregated by class of loans and based on last credit decision or year of origination:

June 30, 2023	Term Loans Amortized Cost Basis by Origination Year
(in thousands)	2023			2022			2021			2020			2019			Prior			Revolving Loans		Total
Hotel/motel
Risk rating:
Pass	$	38,210		$	150,521		$	28,454		$	17,968		$	47,039		$	47,091		$	4,043	$	333,326
Watch		2,949			6,957			8,873			4,709			3,412			3,871			0		30,771
OAEM		0			0			6,971			0			0			1,913			0		8,884
Substandard		0			0			0			0			0			0			0		0
Doubtful		0			0			0			0			0			0			0		0
Total hotel/motel		41,159			157,478			44,298			22,677			50,451			52,875			4,043		372,981
Commercial real estate residential
Risk rating:
Pass		55,238			104,912			104,205			35,701			12,921			41,206			14,132		368,315
Watch		753			1,010			835			1,948			743			7,367			144		12,800
OAEM		0			0			0			0			0			65			0		65
Substandard		286			617			4,295			623			289			6,019			0		12,129
Doubtful		0			0			0			0			0			0			0		0
Total commercial real estate residential		56,277			106,539			109,335			38,272			13,953			54,657			14,276		393,309
Commercial real estate residential current period gross charge-offs		0			0			(28	)		0			0			0			0		(28	)
Commercial real estate nonresidential
Risk rating:
Pass		81,927			153,561			152,539			79,949			66,557			166,883			25,508		726,924
Watch		300			3,966			6,499			9,716			7,618			6,710			711		35,520
OAEM		2,375			19			0			0			0			74			0		2,468
Substandard		1,370			1,439			2,522			4,543			3,096			9,701			0		22,671
Doubtful		0			0			0			0			0			15			0		15
Total commercial real estate nonresidential		85,972			158,985			161,560			94,208			77,271			183,383			26,219		787,598
Commercial real estate nonresidential current period gross charge-offs		0			0			0			(9	)		0			0			0		(9	)
Dealer floorplans
Risk rating:
Pass		0			0			0			0			0			0			76,903		76,903
Watch		0			0			0			0			0			0			0		0
OAEM		0			0			0			0			0			0			0		0
Substandard		0			0			0			0			0			0			0		0
Doubtful		0			0			0			0			0			0			0		0
Total dealer floorplans		0			0			0			0			0			0			76,903		76,903
Commercial other
Risk rating:
Pass		41,105			60,219			54,817			31,984			6,523			24,483			78,670		297,801
Watch		541			1,390			980			156			334			771			5,990		10,162
OAEM		0			30			0			0			0			0			30		60
Substandard		466			4,216			4,807			943			219			564			600		11,815
Doubtful		0			0			0			0			0			0			0		0
Total commercial other		42,112			65,855			60,604			33,083			7,076			25,818			85,290		319,838
Commercial other current period gross charge-offs		(321	)		(632	)		(154	)		(17	)		(90	)		(46	)		0		(1,260	)
Commercial loans
Risk rating:
Pass		216,480			469,213			340,015			165,602			133,040			279,663			199,256		1,803,269
Watch		4,543			13,323			17,187			16,529			12,107			18,719			6,845		89,253
OAEM		2,375			49			6,971			0			0			2,052			30		11,477
Substandard		2,122			6,272			11,624			6,109			3,604			16,284			600		46,615
Doubtful		0			0			0			0			0			15			0		15
Total commercial loans	$	225,520		$	488,857		$	375,797		$	188,240		$	148,751		$	316,733		$	206,731	$	1,950,629
Total commercial loans current period gross charge-offs	$	(321	)	$	(632	)	$	(182	)	$	(26	)	$	(90	)	$	(46	)	$	0	$	(1,297	)

December 31, 2022	Term Loans Amortized Cost Basis by Origination Year
(in thousands)	2022		2021		2020		2019		2018		Prior		Revolving Loans		Total
Hotel/motel
Risk rating:
Pass	$	145,262	$	36,002	$	17,742	$	54,328	$	13,178	$	35,179	$	545	$	302,236
Watch		7,921		8,996		5,523		3,453		0		13,555		0		39,448
OAEM		0		0		0		0		0		1,956		0		1,956
Substandard		0		0		0		0		0		0		0		0
Doubtful		0		0		0		0		0		0		0		0
Total hotel/motel		153,183		44,998		23,265		57,781		13,178		50,690		545		343,640
Commercial real estate residential
Risk rating:
Pass		119,826		110,963		38,423		15,467		10,492		36,307		14,297		345,775
Watch		1,474		898		1,675		848		2,136		7,015		152		14,198
OAEM		0		0		0		39		0		0		29		68
Substandard		182		4,289		1,878		346		3,639		2,539		0		12,873
Doubtful		0		0		0		0		0		0		0		0
Total commercial real estate residential		121,482		116,150		41,976		16,700		16,267		45,861		14,478		372,914
Commercial real estate nonresidential
Risk rating:
Pass		175,220		171,311		80,932		70,848		44,099		137,575		23,166		703,151
Watch		3,331		5,765		10,090		2,178		1,962		10,022		1,550		34,898
OAEM		19		0		0		0		0		90		0		109
Substandard		1,939		2,537		4,877		3,135		508		10,865		25		23,886
Doubtful		0		0		0		0		0		305		0		305
Total commercial real estate nonresidential		180,509		179,613		95,899		76,161		46,569		158,857		24,741		762,349
Dealer floorplans
Risk rating:
Pass		0		0		0		0		0		0		77,153		77,153
Watch		0		0		0		0		0		0		380		380
OAEM		0		0		0		0		0		0		0		0
Substandard		0		0		0		0		0		0		0		0
Doubtful		0		0		0		0		0		0		0		0
Total dealer floorplans		0		0		0		0		0		0		77,533		77,533
Commercial other
Risk rating:
Pass		78,846		60,550		34,841		8,922		2,333		23,961		77,355		286,808
Watch		1,622		393		604		217		159		780		6,402		10,177
OAEM		30		0		0		0		0		0		30		60
Substandard		6,090		5,489		885		356		143		758		952		14,673
Doubtful		466		129		0		109		0		0		0		704
Total commercial other		87,054		66,561		36,330		9,604		2,635		25,499		84,739		312,422
Commercial loans
Risk rating:
Pass		519,154		378,826		171,938		149,565		70,102		233,022		192,516		1,715,123
Watch		14,348		16,052		17,892		6,696		4,257		31,372		8,484		99,101
OAEM		49		0		0		39		0		2,046		59		2,193
Substandard		8,211		12,315		7,640		3,837		4,290		14,162		977		51,432
Doubtful		466		129		0		109		0		305		0		1,009
Total commercial loans	$	542,228	$	407,322	$	197,470	$	160,246	$	78,649	$	280,907	$	202,036	$	1,868,858

The following tables present the credit risk profile of CTBI’s residential real estate and consumer loan portfolios based on performing or nonperforming status, segregated by class:

June 30, 2023	Term Loans Amortized Cost Basis by Origination Year
(in thousands)	2023			2022			2021			2020			2019			Prior			Revolving Loans		Total
Home equity lines
Performing	$	0		$	0		$	0		$	0		$	0		$	9,047		$	122,332	$	131,379
Nonperforming		0			0			0			0			0			403			251		654
Total home equity lines		0			0			0			0			0			9,450			122,583		132,033
Home equity lines current period gross charge-offs																	(13	)		0		(13	)
Mortgage loans
Performing		96,372			175,566			169,481			125,782			59,375			249,229			0		875,805
Nonperforming		0			0			311			121			773			6,094			0		7,299
Total mortgage loans		96,372			175,566			169,792			125,903			60,148			255,323			0		883,104
Mortgage loans current period gross charge-offs		0			0			(47	)		0			(1	)		(47	)		0		(95	)
Residential loans
Performing		96,372			175,566			169,481			125,782			59,375			258,276			122,332		1,007,184
Nonperforming		0			0			311			121			773			6,497			251		7,953
Total residential loans	$	96,372		$	175,566		$	169,792		$	125,903		$	60,148		$	264,773		$	122,583	$	1,015,137
Total residential loans current period gross charge-offs	$	0		$	0		$	(47	)	$	0		$	(1	)	$	(60	)	$	0	$	(108	)
Consumer direct loans
Performing	$	35,168		$	45,893		$	33,307		$	19,215		$	9,082		$	15,177		$	0	$	157,842
Nonperforming		0			6			0			0			0			0			0		6
Total consumer direct loans		35,168			45,899			33,307			19,215			9,082			15,177			0		157,848
Total consumer direct loans current period gross charge-offs		0			(146	)		(42	)		(30	)		(14	)		(6	)		0		(238	)
Consumer indirect loans
Performing		217,355			306,664			136,812			90,812			33,856			20,143			0		805,642
Nonperforming		0			157			183			36			18			45			0		439
Total consumer indirect loans		217,355			306,821			136,995			90,848			33,874			20,188			0		806,081
Total consumer indirect loans current period gross charge-offs		(42	)		(785	)		(883	)		(217	)		(75	)		(73	)		0		(2,075	)
Consumer loans
Performing		252,523			352,557			170,119			110,027			42,938			35,320			0		963,484
Nonperforming		0			163			183			36			18			45			0		445
Total consumer loans	$	252,523		$	352,720		$	170,302		$	110,063		$	42,956		$	35,365		$	0	$	963,929
Total consumer loans current period gross charge-offs	$	(42	)	$	(931	)	$	(925	)	$	(247	)	$	(89	)	$	(79	)	$	0	$	(2,313	)

December 31, 2022	Term Loans Amortized Cost Basis by Origination Year
(in thousands)	2022		2021		2020		2019		2018		Prior		Revolving Loans		Total
Home equity lines
Performing	$	0	$	0	$	0	$	0	$	0	$	10,195	$	109,567	$	119,762
Nonperforming		0		0		0		0		0		502		276		778
Total home equity lines		0		0		0		0		0		10,697		109,843		120,540
Mortgage loans
Performing		176,736		177,469		132,795		62,415		30,473		236,110		0		815,998
Nonperforming		0		282		98		791		422		7,405		0		8,998
Total mortgage loans		176,736		177,751		132,893		63,206		30,895		243,515		0		824,996
Residential loans
Performing		176,736		177,469		132,795		62,415		30,473		246,305		109,567		935,760
Nonperforming		0		282		98		791		422		7,907		276		9,776
Total residential loans	$	176,736	$	177,751	$	132,893	$	63,206	$	30,895	$	254,212	$	109,843	$	945,536
Consumer direct loans
Performing	$	62,239	$	42,014	$	23,921	$	11,166	$	6,766	$	11,357	$	0	$	157,463
Nonperforming		25		11		5		0		0		0		0		41
Total consumer direct loans		62,264		42,025		23,926		11,166		6,766		11,357		0		157,504
Consumer indirect loans
Performing		371,079		168,513		116,267		45,748		26,247		9,073		0		736,927
Nonperforming		65		251		96		30		1		22		0		465
Total consumer indirect loans		371,144		168,764		116,363		45,778		26,248		9,095		0		737,392
Consumer loans
Performing		433,318		210,527		140,188		56,914		33,013		20,430		0		894,390
Nonperforming		90		262		101		30		1		22		0		506
Total consumer loans	$	433,408	$	210,789	$	140,289	$	56,944	$	33,014	$	20,452	$	0	$	894,896

* 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 was $3.8 million at June 30, 2023.  The total of consumer mortgage loans secured by real estate properties for which formal foreclosure proceedings have resumed with restricted parameters was $3.3  million at December 31, 2022.

In accordance with ASC 326-20-30-2, if a loan does not share risk characteristics with other pooled loans in determining the allowance for credit losses, the loan shall be evaluated for expected credit losses on an individual basis. Of the loans that CTBI has individually evaluated, the loans listed below by segment are those that are collateral dependent:

	June 30, 2023
(in thousands)	Number of Loans		Recorded Investment		Specific Reserve
Hotel/motel		2	$	8,114	$	0
Commercial real estate residential		3		6,353		0
Commercial real estate nonresidential		6		11,704		0
Commercial other		2		6,585		0
Total collateral dependent loans		13	$	32,756	$	0

	December 31, 2022
(in thousands)	Number of Loans		Recorded Investment		Specific Reserve
Hotel/motel		1	$	1,168	$	0
Commercial real estate residential		4		7,786		0
Commercial real estate nonresidential		8		14,718		200
Commercial other		2		8,926		1,000
Total collateral dependent loans		15	$	32,598	$	1,200

	June 30, 2022
(in thousands)	Number of Loans		Recorded Investment		Specific Reserve
Hotel/motel		1	$	1,196	$	0
Commercial real estate residential		4		6,957		0
Commercial real estate nonresidential		10		18,218		200
Commercial other		3		10,190		550
Total collateral dependent loans		18	$	36,561	$	750

The hotel/motel, commercial real estate residential, and commercial real estate nonresidential segments are all collateralized with real estate. The two loans listed in the commercial other segment at June 30, 2023 are collateralized by inventory, equipment, and accounts receivable.

Certain loans have been modified where the customer is facing financial difficulty and economic concessions were granted to borrowers consisting of reductions in the interest rates, payment extensions, forgiveness of principal, and forbearances.  Those loans, segregated by class of loans and concession granted, are presented below for the three months ended June 30, 2023:

	Interest Rate Reduction					Term Extension
(in thousands)	Amortized Cost at June 30, 2023		% of total			Amortized Cost at June 30, 2023		% of total
Hotel/motel	$	0		0.00	%	$	0		0.00	%
Commercial real estate residential		0		0.00			44		0.01
Commercial real estate nonresidential		73		0.01			13		0.00
Dealer floorplans		0		0.00			0		0.00
Commercial other		0		0.00			522		0.16
Commercial loans		73		0.00			579		0.03
Real estate mortgage		0		0.00			877		0.10
Home equity lines		0		0.00			0		0.00
Residential loans		0		0.00			877		0.09
Consumer direct		0		0.00			54		0.03
Consumer indirect		0		0.00			95		0.01
Consumer loans		0		0.00			149		0.02
Loans and lease financing	$	73		0.00	%	$	1,605		0.04	%

	Combination – Term Extension and Interest Rate Reduction					Payment Change
(in thousands)	Amortized Cost at June 30, 2023		% of total			Amortized Cost at June 30, 2023		% of total
Hotel/motel	$	0		0.00	%	$	0		0.00	%
Commercial real estate residential		0		0.00			0		0.00
Commercial real estate nonresidential		0		0.00			0		0.00
Dealer floorplans		0		0.00			0		0.00
Commercial other		0		0.00			300		0.09
Commercial loans		0		0.00			300		0.02
Real estate mortgage		209		0.02			0		0.00
Home equity lines		43		0.03			116		0.09
Residential loans		252		0.02			116		0.01
Consumer direct		0		0.00			0		0.00
Consumer indirect		0		0.00			0		0.00
Consumer loans		0		0.00			0		0.00
Loans and lease financing	$	252		0.01	%	$	416		0.01	%

The following table describes the financial effect of the modifications made to borrowers experiencing financial difficulty for the three months ended June 30, 2023:

Loan Type	Interest Rate Reduction Financial Impact	Term Extension Financial Impact
Hotel/motel
Commercial real estate residential		Added a weighted-average 11.7 years to life of the loans
Commercial real estate nonresidential	Reduced weighted-average contractual interest rate from 10.8% to 8.5%
Dealer floorplans
Commercial other		Added a weighted-average 0.8 years to life of the loans
Real estate mortgage		Added a weighted-average 4 years to life of the loans
Home equity lines
Consumer direct		Added a weighted-average 0.2 years to the life of the loans
Consumer indirect		Added a weighted-average 0.5 years to the life of the loans

Loan Type	Combination – Term Extension and  Interest Rate Reduction Financial Impact	Payment Changes Financial Impact
Hotel/motel
Commercial real estate residential
Commercial real estate nonresidential
Dealer floorplans
Commercial other		Provided payment changes that will be added to the end of the original loan term
Real estate mortgage	Reduced weighted-average contractual interest rate from 6.8% to 6.2% and increased the weighted-average life by 9.7 years
Home equity lines	Reduced weighted-average contractual interest rate from 10.3% to 8.3% and increased the weighted-average life by 14.3 years	Provided payment changes that will be added to the end of the original loan term
Consumer direct
Consumer indirect

Those loans, segregated by class of loans and concession granted, are presented below for the six months ended June 30, 2023:

	Interest Rate Reduction					Term Extension
(in thousands)	Amortized Cost at June 30, 2023		% of total			Amortized Cost at June 30, 2023		% of total
Hotel/motel	$	0		0.00	%	$	0		0.00	%
Commercial real estate residential		311		0.08			1,383		0.35
Commercial real estate nonresidential		4,573		0.58			4,800		0.61
Dealer floorplans		0		0.00			0		0.00
Commercial other		0		0.00			1,474		0.46
Commercial loans		4,884		0.25			7,657		0.39
Real estate mortgage		58		0.01			3,317		0.38
Home equity lines		0		0.00			54		0.04
Residential loans		58		0.01			3,371		0.33
Consumer direct		0		0.00			224		0.14
Consumer indirect		0		0.00			450		0.06
Consumer loans		0		0.00			674		0.07
Loans and lease financing	$	4,942		0.13	%	$	11,702		0.30	%

	Combination – Term Extension and Interest Rate Reduction					Payment Change
(in thousands)	Amortized Cost at June 30, 2023		% of total			Amortized Cost at June 30, 2023		% of total
Hotel/motel	$	0		0.00	%	$	0		0.00	%
Commercial real estate residential		88		0.02			0		0.00
Commercial real estate nonresidential		0		0.00			0		0.00
Dealer floorplans		0		0.00			0		0.00
Commercial other		0		0.00			300		0.09
Commercial loans		88		0.00			300		0.02
Real estate mortgage		427		0.05			0		0.00
Home equity lines		77		0.06			116		0.09
Residential loans		504		0.05			116		0.01
Consumer direct		0		0.00			20		0.01
Consumer indirect		0		0.00			0		0.00
Consumer loans		0		0.00			20		0.00
Loans and lease financing	$	592		0.02	%	$	436		0.01	%

The following table describes the financial effect of the modifications made to borrowers experiencing financial difficulty for the six months ended June 30, 2023:

Loan Type	Interest Rate Reduction Financial Impact	Term Extension Financial Impact
Hotel/motel
Commercial real estate residential	Reduced weighted-average contractual interest rate from 9.6% to 8.0%	The weighted-average term was not increased with the changes to this portfolio
Commercial real estate nonresidential	Reduced weighted-average contractual interest rate from 9.5% to 7.5%	The weighted-average term was not increased with the changes to this portfolio
Dealer floorplans
Commercial other		Added a weighted-average 1.4 years to life of the loans
Real estate mortgage	Resulted in no change of the weighted average contractual interest rate of 3.0%	Added a weighted-average 2.8 years to life of the loans
Home equity lines		Added a weighted-average 6.8 years to life of the loans
Consumer direct		Removed a weighted-average 0.6 years from the life of the loans
Consumer indirect		Added a weighted-average 0.3 years to the life of the loans

Loan Type	Combination – Term Extension and Interest Rate Reduction Financial Impact	Payment Changes Financial Impact
Hotel/motel
Commercial real estate residential	Reduced weighted-average contractual interest rate from 10.4% to 7.2% and increased the weighted-average life by 5.9 years
Commercial real estate nonresidential
Dealer floorplans
Commercial other		Provided payment changes that will be added to the end of the original loan term
Real estate mortgage	Reduced weighted-average contractual interest rate from 7.1% to 6.1% and increased the weighted-average life by 11.3 years
Home equity lines	Reduced weighted-average contractual interest rate from 9.1% to 8.0% and increased the weighted-average life by 10.2 years	Provided payment changes that will be added to the end of the original loan term
Consumer direct		Provided payment changes that will be added to the end of the original loan term
Consumer indirect

 Presented  below, segregated by class of loans, are TDRs that occurred during the three and six months ended June 30, 2022 and the year ended December 31, 2022:

	Three Months Ended June 30, 2022
	Pre-Modification Outstanding Balance
(in thousands)	Number of Loans		Term Modification		Combination		Total Modification
Hotel/motel		0	$	0	$	0	$	0
Commercial real estate residential		0		0		0		0
Commercial real estate nonresidential		0		0		0		0
Commercial other		5		5,562		0		5,562
Total commercial loans		5		5,562		0		5,562
Real estate mortgage		1		305		0		305
Total residential loans		1		305		0		305
Total troubled debt restructurings		6	$	5,867	$	0	$	5,867

	Three Months Ended June 30, 2022
	Post-Modification Outstanding Balance
(in thousands)	Number of Loans		Term Modification		Combination		Total Modification
Hotel/motel		0	$	0	$	0	$	0
Commercial real estate residential		0		0		0		0
Commercial real estate nonresidential		0		0		0		0
Commercial other		5		5,562		0		5,562
Total commercial loans		5		5,562		0		5,562
Real estate mortgage		1		305		0		305
Total residential loans		1		305		0		305
Total troubled debt restructurings		6	$	5,867	$	0	$	5,867

	Six Months Ended June 30, 2022
	Pre-Modification Outstanding Balance
(in thousands)	Number of Loans		Term Modification		Combination		Total Modification
Hotel/motel		0	$	0	$	0	$	0
Commercial real estate residential		2		154		0		154
Commercial real estate nonresidential		2		245		0		245
Commercial other		9		6,526		0		6,526
Total commercial loans		13		6,925		0		6,925
Real estate mortgage		3		305		916		1,221
Total residential loans		3		305		916		1,221
Total troubled debt restructurings		16	$	7,230	$	916	$	8,146

	Six Months Ended June 30, 2022
	Post-Modification Outstanding Balance
(in thousands)	Number of Loans		Term Modification		Combination		Total Modification
Hotel/motel		0	$	0	$	0	$	0
Commercial real estate residential		2		154		0		154
Commercial real estate nonresidential		2		244		0		244
Commercial other		9		6,525		0		6,525
Total commercial loans		13		6,923		0		6,923
Real estate mortgage		3		305		916		1,221
Total residential loans		3		305		916		1,221
Total troubled debt restructurings		16	$	7,228	$	916	$	8,144

	Year Ended December 31, 2022
	Pre-Modification Outstanding Balance
(in thousands)	Number of Loans		Term Modification		Combination		Other		Total Modification
Commercial real estate residential		6	$	659	$	0	$	66	$	725
Commercial real estate nonresidential		8		1,206		0		118		1,324
Hotel/motel		0		0		0		0		0
Commercial other		22		12,812		0		66		12,878
Total commercial loans		36		14,677		0		250		14,927
Real estate mortgage		5		593		1,309		0		1,902
Total residential loans		5		593		1,309		0		1,902
Total troubled debt restructurings		41	$	15,270	$	1,309	$	250	$	16,829

	Year Ended December 31, 2022
	Post-Modification Outstanding Balance
(in thousands)	Number of Loans		Term Modification		Combination		Other		Total Modification
Commercial real estate residential		6	$	659	$	0	$	66	$	725
Commercial real estate nonresidential		8		1,342		0		118		1,460
Hotel/motel		0		0		0		0		0
Commercial other		22		12,811		0		66		12,877
Total commercial loans		36		14,812		0		250		15,062
Real estate mortgage		5		593		1,309		0		1,902
Total residential loans		5		593		1,309		0		1,902
Total troubled debt restructurings		41	$	15,405	$	1,309	$	250	$	16,964

Loans retain their accrual status at the time of their modification.  As a result, if a loan is on nonaccrual at the time it is modified, it stays as nonaccrual, and if a loan is on accrual at the time of the modification, it generally stays on accrual.  Commercial and consumer loans modified due to a borrower’s financial difficulty are closely monitored for delinquency as an early indicator of possible future default.  If a loan to a borrower experiencing financial difficulty subsequently defaults, CTBI evaluates the loan for possible further impairment. The table below represents the payment status of modified loans to borrowers experiencing financial difficulty.

	Past Due Status (Amortized Cost Basis)
	Current			30-89 Days		90+ Days	Nonaccrual
Hotel/motel	$	0	$	0	$	0	$	0
Commercial real estate residential		1,741		40		0		0
Commercial real estate nonresidential		9,373		0		0		0
Dealer floorplans		0		0		0		0
Commercial other		1,145		292		0		337
Real estate mortgage		3,374		125		118		185
Home equity lines		168		59		0		22
Consumer direct		239		5		0		0
Consumer indirect		371		78		0		0
Total	$	16,411	$	599	$	118	$	544

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.  During the quarter ended June 30, 2023, there were three loans to borrowers experiencing financial difficulty that subsequently defaulted.  CTBI considers a loan in default when it is 90 days or more past due or transferred to nonaccrual.

There were no troubled debt restructured loans for the three and six months ended June 30, 2023.

Financial instrument credit losses apply to off-balance sheet credit exposures such as unfunded loan commitments and standby letters of credit.  A liability for expected credit losses for off-balance sheet exposures is recognized if the entity has a present contractual obligation to extend the credit and the obligation is not unconditionally cancellable by the entity.  Changes in this allowance are reflected in other operating expenses within the non-interest expense category.  As of June 30, 2023 and December 31, 2022, the total unfunded commitment off-balance sheet credit exposure was $1.1 million and $0.7 million, respectively.

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Other Real Estate Owned

6 Months Ended

Jun. 30, 2023

Other Real Estate Owned [Abstract]

Other Real Estate Owned

Note 5 – 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)	2023			2022			2023			2022
Beginning balance of other real estate owned	$	2,776		$	2,299		$	3,671		$	3,486
New assets acquired		124			307			175			444
Capitalized costs		40			73			40			73
Fair value adjustments		(25	)		(23	)		(106	)		(269	)
Sale of assets		(868	)		(702	)		(1,733	)		(1,780	)
Ending balance of other real estate owned	$	2,047		$	1,954		$	2,047		$	1,954

Carrying costs and fair value adjustments associated with foreclosed properties for the three months ended June 30, 2023 and 2022 were $0.1 million in each period. Carrying costs and fair value adjustments associated with foreclosed properties for the six months ended June 30, 2023 and 2022 were $0.2 million and $0.4 million, respectively. See Note 1 for a description of our accounting policies relative to foreclosed properties and other real estate owned.

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

(in thousands)	June 30 2023		December 31 2022
1-4 family	$	574	$	859
Construction/land development/other		683		867
Non-farm/non-residential		790		1,945
Total foreclosed properties	$	2,047	$	3,671

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Repurchase Agreements

6 Months Ended

Jun. 30, 2023

Repurchase Agreements [Abstract]

Repurchase Agreements

Note 6 – 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 $300.3 million and $273.8 million at June 30, 2023 and December 31, 2022, 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, 2023 and December 31, 2022 is presented in the following tables:

	June 30, 2023
	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	$	19,951	$	2,000	$	0	$	22,608	$	44,559
State and political subdivisions		99,257		1,391		0		7,898		108,546
U.S. government sponsored agency mortgage-backed securities		23,552		7,609		0		43,633		74,794
Asset-backed securities		1,121		0		0		0		1,121
Total	$	143,881	$	11,000	$	0	$	74,139	$	229,020

	December 31, 2022
	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	$	21,679	$	34	$	2,979	$	1,832	$	26,524
State and political subdivisions		96,627		466		9,634		2,140		108,867
U.S. government sponsored agency mortgage-backed securities		17,964		0		52,387		9,385		79,736
Asset-backed securities		304		0		0		0		304
Total	$	136,574	$	500	$	65,000	$	13,357	$	215,431

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Fair Value of Financial Assets and Liabilities

6 Months Ended

Jun. 30, 2023

Fair Value of Financial Assets and Liabilities [Abstract]

Fair Value of Financial Assets and Liabilities

Note 7 – Fair 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 GAAP, 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 exit price 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 determining an exit price for 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, 2023 and December 31, 2022 and indicate the level within the fair value hierarchy of the valuation techniques.

			Fair Value Measurements at June 30, 2023 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	$	365,394	$	341,199	$	24,195	$	0
State and political subdivisions		259,825		0		259,825		0
U.S. government sponsored agency mortgage-backed securities		487,899		0		487,899		0
Asset-backed securities		88,135		0		88,135		0
Equity securities at fair value		2,545		0		0		2,545
Mortgage servicing rights		8,230		0		0		8,230

			Fair Value Measurements at December 31, 2022 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	$	381,932	$	346,265	$	35,667	$	0
State and political subdivisions		265,102		0		265,102		0
U.S. government sponsored agency mortgage-backed securities		520,085		0		520,085		0
Asset-backed securities		89,107		0		89,107		0
Equity securities at fair value		2,166		0		0		2,166
Mortgage servicing rights		8,468		0		0		8,468

Following is a description of the valuation methodologies and inputs used for assets measured at fair value on a recurring basis and recognized in the accompanying balance sheets, as well as the general classification of such assets pursuant to the valuation hierarchy. These valuation methodologies were applied to all of CTBI’s financial assets carried at fair value. CTBI had no liabilities measured and recorded at fair value as of June 30, 2023 and December 31, 2022. There have been no significant changes in the valuation techniques during the quarter ended June 30, 2023. 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 AFS are reported at fair value on a recurring basis. U.S. Treasury and government agencies 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, U.S. government sponsored agency mortgage-backed securities, and asset-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.

Equity Securities at Fair Value

As of June 30, 2023 and December 31, 2022, the only securities owned by CTBI that were valued using Level 3 criteria are Visa Class B Stock (included in equity securities at fair value). Fair value for Visa Class B Stock is determined by an independent third party utilizing assumptions about factors such as quarterly common stock dividend payments, the conversion of the securities to the relevant Class A Stock shares subject to the prevailing conversion rate, and conversion date. We have concluded the third party assumptions, processes, and conclusions to be reasonable and appropriate in determining the fair value of this asset. See the table below for inputs and valuation techniques used for Level 3 equity securities.

Mortgage Servicing Rights

Mortgage servicing rights (“MSRs”) do not trade in an active, open market with readily observable prices. CTBI reports MSRs 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, MSRs are classified within Level 3 of the hierarchy. Fair value determinations for Level 3 measurements of MSRs 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. We have reviewed the assumptions, processes, and conclusions of the third party provider. We have determined these assumptions, processes, and conclusions to be reasonable and appropriate in determining the fair value of this asset. See the table below for inputs and valuation techniques used for Level 3 MSRs.

Level 3 Reconciliation

Following is a reconciliation of the beginning and ending balances of recurring fair value measurements, for the periods indicated, using significant unobservable (Level 3) inputs:

	Three Months Ended June 30, 2023					Three Months Ended June 30, 2022
(in thousands)	Equity Securities at Fair Value		Mortgage Servicing Rights			Equity Securities at Fair Value			Mortgage Servicing Rights
Beginning balance	$	2,380	$	8,121		$	2,352		$	7,748
Total unrealized gains (losses)
Included in net income		165		80			(224	)		468
Issues		0		46			0			223
Settlements		0		(17	)		0			(219	)
Ending balance	$	2,545	$	8,230		$	2,128		$	8,220
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	$	165	$	80		$	(224	)	$	468

	Six Months Ended June 30, 2023					Six Months Ended June 30, 2022
(in thousands)	Equity Securities at Fair Value		Mortgage Servicing Rights			Equity Securities at Fair Value			Mortgage Servicing Rights
Beginning balance	$	2,166	$	8,468		$	2,253		$	6,774
Total unrealized gains (losses)
Included in net income		379		(134	)		(125	)		1,451
Issues		0		96			0			452
Settlements		0		(200	)		0			(457	)
Ending balance	$	2,545	$	8,230		$	2,128		$	8,220
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	$	379	$	(134	)	$	(125	)	$	1,451

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				Six Months Ended
	June 30				June 30
(in thousands)	2023		2022		2023		2022
Total gains	$	227	$	25	$	44	$	869

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, 2023 and December 31, 2022 and indicate the level within the fair value hierarchy of the valuation techniques.

			Fair Value Measurements at June 30, 2023 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
Other real estate owned	$	177	$	0	$	0	$	177

			Fair Value Measurements at December 31, 2022 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	$	2,703	$	0	$	0	$	2,703
Other real estate owned		570		0		0		570

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.

Collateral Dependent Loans

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

CTBI considers the appraisal or evaluation as the starting point for determining fair value and then considers other factors and events in the environment that may affect the fair value. Appraisals of the collateral underlying collateral-dependent loans are obtained when the loan is determined to be collateral-dependent and subsequently as deemed necessary by the Chief Credit Officer. 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 collateral dependent are loans for which the repayment is expected to be provided substantially through the operation or sale of the collateral when the borrower is experiencing financial difficulty in accordance with ASC 326-20-35-5.  There were no collateral dependent loans as of June 30, 2023.

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.  Fair value adjustments on OREO disclosed above were $25 thousand for the quarter ended June 30, 2023, $106 thousand for the six months ended June 30, 2023, and $285 thousand for the year ended December 31, 2022.

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, 2023 and December 31, 2022.

	Quantitative Information about Level 3 Fair Value Measurements
(in thousands)	Fair Value at June 30, 2023		Valuation Technique(s)	Unobservable Input	Range (Weighted Average)
Equity securities at fair value	$	2,545	Discount cash flows, computer pricing model	Discount rate	8.0% - 12.0% (10.0%)
				Conversion date	Dec 2025 - Dec 2029 (Dec 2027)
Mortgage servicing rights	$	8,230	Discount cash flows, computer pricing model	Constant prepayment rate	0.0% - 26.7% (7.4%)
				Probability of default	0.0% - 100% (1.3%)
				Discount rate	9.5% - 11.5% (10.0%)
Other real estate owned	$	177	Market comparable properties	Comparability adjustments	0.0% - 10.0% (10.0%)

	Quantitative Information about Level 3 Fair Value Measurements
(in thousands)	Fair Value at December 31, 2022		Valuation Technique(s)	Unobservable Input	Range (Weighted Average)
Equity securities at fair value	$	2,166	Discount cash flows, computer pricing model	Discount rate	8.0% - 12.0% (10.0%)
				Conversion date	Dec 2025 - Dec 2029 (Dec 2027)
Mortgage servicing rights	$	8,468	Discount cash flows, computer pricing model	Constant prepayment rate	6.5% - 28.0% (7.1%)
				Probability of default	0.0% - 100.0% (1.2%)
				Discount rate	9.5% - 12.0% (10.0%)
Collateral-dependent loans	$	2,703	Market comparable properties	Marketability discount	52.0% - 52.0% (52.0%)
Other real estate owned	$	570	Market comparable properties	Comparability adjustments	10.0% - 30.6% (10.9%)

Uncertainty of Fair Value Measurements

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

Equity Securities at Fair Value

Fair value for equity securities is derived based on unobservable inputs, such as the discount rate, quarterly dividends payable to the Visa Class B common stock, and the prevailing conversion rate at the conversion date. The most recent conversion rate of 1.5902 and the most recent dividend rate of 0.7156 were used to derive the fair value estimate. Significant increases (decreases) in either of those inputs in isolation would result in a significantly lower (higher) fair value measurement. Generally, a change in the assumption used for discount rate is accompanied by a directionally opposite change in the fair value estimate.

Mortgage Servicing Rights

Fair value for MSRs is derived based on unobservable inputs, such as prepayment speeds of the underlying loans generated using the Andrew Davidson Prepayment Model, FHLMC/FNMA guidelines, the weighted average life of the loan, the discount rate, the weighted average coupon, and the weighted average default rate. Significant increases (decreases) in either of those inputs in isolation would result in a significantly lower (higher) fair value measurement. Generally, a change in the assumption used for prepayment speeds is accompanied by a directionally opposite change in the assumption for interest rates.

Fair Value of Financial Instruments

The following table presents estimated fair value of CTBI’s financial instruments as of June 30, 2023 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 June 30, 2023 were measured using an exit price notion.

			Fair Value Measurements at June 30, 2023 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	$	109,545	$	109,545	$	0	$	0
Certificates of deposit in other banks		245		0		245		0
Debt securities available-for-sale		1,201,253		341,199		860,054		0
Equity securities at fair value		2,545		0		0		2,545
Loans held for sale		238		244		0		0
Loans, net		3,881,677		0		0		3,717,729
Federal Home Loan Bank stock		6,545		0		6,545		0
Federal Reserve Bank stock		4,887		0		4,887		0
Accrued interest receivable		20,257		0		20,257		0
Financial liabilities:
Deposits	$	4,516,660	$	1,361,078	$	3,163,628	$	0
Repurchase agreements		229,020		0		0		229,277
Federal funds purchased		500		0		500		0
Advances from Federal Home Loan Bank		345		0		242		0
Long-term debt		64,350		0		0		52,043
Accrued interest payable		5,624		0		5,624		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, 2022 and indicates the level within the fair value hierarchy of the valuation techniques.

			Fair Value Measurements at December 31, 2022 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	$	128,686	$	128,686	$	0	$	0
Certificates of deposit in other banks		245		0		245		0
Debt securities available-for-sale		1,256,226		346,265		909,961		0
Equity securities at fair value		2,166		0		0		2,166
Loans held for sale		109		112		0		0
Loans, net		3,663,309		0		0		3,511,810
Federal Home Loan Bank stock		6,676		0		6,676		0
Federal Reserve Bank stock		4,887		0		4,887		0
Accrued interest receivable		19,592		0		19,592		0
Financial liabilities:
Deposits	$	4,426,143	$	1,394,915	$	3,050,144	$	0
Repurchase agreements		215,431		0		0		215,542
Federal funds purchased		500		0		500		0
Advances from Federal Home Loan Bank		355		0		380		0
Long-term debt		57,841		0		0		55,860
Accrued interest payable		2,237		0		2,237		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

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Revenue Recognition

6 Months Ended

Jun. 30, 2023

Revenue Recognition [Abstract]

Revenue Recognition

Note 8 – Revenue Recognition

CTBI’s primary source of revenue is interest income generated from loans and investment securities.  Interest income is recognized according to the terms of the financial instrument agreement over the life of the loan or investment security unless it is determined that the counterparty is unable to continue making interest payments.  Interest income also includes prepaid interest fees from commercial customers, which approximates the interest foregone on the balance of the loan prepaid.

CTBI’s additional source of income, also referred to as noninterest income, includes service charges on deposit accounts, gains on sales of loans, trust and wealth management income, loan related fees, brokerage revenue, and other miscellaneous income and is largely based on contracts with customers.  In these cases, CTBI recognizes revenue when it satisfies a performance obligation by transferring control over a product or service to a customer. CTBI considers a customer to be any party to which we will provide goods or services that are an output of CTBI’s ordinary activities in exchange for consideration.  There is little seasonality with regards to revenue from contracts with customers and all inter-company revenue is eliminated when CTBI’s financial statements are consolidated.

Generally, CTBI enters into contracts with customers that are short-term in nature where the performance obligations are fulfilled and payment is processed at the same time.  Such examples include revenue related to merchant fees, interchange fees, and investment services income.  In addition, revenue generated from existing customer relationships such as deposit accounts are also considered short-term in nature, because the relationship may be terminated at any time and payment is processed at the time performance obligations are fulfilled.  As a result, CTBI does not have contract assets, contract liabilities, or related receivable accounts for contracts with customers.   In cases where collectability is a concern, CTBI does not record revenue.

Generally, the pricing of transactions between CTBI and each customer is either (i) established within a legally enforceable contract between the two parties, as is the case with loan sales, or (ii) disclosed to the customer at a specific point in time, as is the case when a deposit account is opened or before a new loan is underwritten.  Fees are usually fixed at a specific amount or as a percentage of a transaction amount.  No judgment or estimates by management are required to record revenue related to these transactions and pricing is clearly identified within these contracts.

CTBI primarily operates in Kentucky and contiguous areas. Therefore, all significant operating decisions are based upon analysis of CTBI as one operating segment.

We disaggregate our revenue from contracts with customers by contract-type and timing of revenue recognition, as we believe it best depicts how the nature, amount, timing, and uncertainty of our revenue and cash flows are affected by economic factors.  Noninterest income not generated from customers during CTBI’s ordinary activities primarily relates to MSRs, gains/losses on the sale of investment securities, gains/losses on the sale of OREO, gains/losses on the sale of property, plant and equipment, and income from bank owned life insurance.

For more information related to our components of noninterest income, see the Condensed Consolidated Statements of Income and Comprehensive Income above.

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Earnings Per Share

6 Months Ended

Jun. 30, 2023

Earnings Per Share [Abstract]

Earnings Per Share

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)	2023		2022		2023		2022
Numerator:
Net income	$	19,404	$	20,271	$	38,717	$	39,999
Denominator:
Basic earnings per share:
Weighted average shares		17,884		17,835		17,877		17,827
Diluted earnings per share:
Effect of dilutive stock options and restricted stock grants		6		8		8		11
Adjusted weighted average shares		17,890		17,843		17,885		17,838
Earnings per share:
Basic earnings per share	$	1.09	$	1.14	$	2.17	$	2.24
Diluted earnings per share		1.08		1.14		2.16		2.24

There were no options to purchase common shares that were excluded from the diluted calculations above for the three and six months ended June 30, 2023 and 2022. 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.

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Accumulated Other Comprehensive Income (Loss)

6 Months Ended

Jun. 30, 2023

Accumulated Other Comprehensive Income (Loss) [Abstract]

Accumulated Other Comprehensive Income (Loss)

Note 10 – Accumulated Other Comprehensive Income (Loss)

Unrealized gains (losses) on AFS securities

Amounts reclassified from accumulated other comprehensive income (loss) (“AOCI”) and the affected line items in the statements of income during the three and six months ended June 30, 2023 and 2022 were:

	Amounts Reclassified from AOCI
(in thousands)	Three Months Ended June 30					Six Months Ended June 30
	2023		2022			2023		2022
Affected line item in the statements of income
Securities gains (losses)	$	0	$	(1	)	$	4	$	(1	)
Tax expense (benefit)		0		0			1		0
Total reclassifications out of AOCI	$	0	$	(1	)	$	3	$	(1	)

XML

Insider Trading Arrangements	3 Months Ended
	Jun. 30, 2023
Trading Arrangements, by Individual
Rule 10b5-1 Arrangement Adopted	false
Non-Rule 10b5-1 Arrangement Adopted	false
Rule 10b5-1 Arrangement Terminated	false
Non-Rule 10b5-1 Arrangement Terminated	false

XML

Summary of Significant Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2023

Summary of Significant Accounting Policies [Abstract]

Principles of Consolidation

Principles of Consolidation – The unaudited condensed consolidated financial statements include the accounts of CTBI and its separate and distinct, wholly owned subsidiaries Community Trust Bank, Inc. (“CTB”) and Community Trust and Investment Company.  All significant intercompany transactions have been eliminated in consolidation.

New Accounting Standards

New Accounting Standards –

➢       Facilitation of the Effects of Reference Rate Reform on Financial Reporting – In December 2022, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2022-06, Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848, which extends the period of time preparers can utilize the reference rate reform relief guidance.  The amendments in ASU No. 2022-06 are effective for all entities upon issuance.  In 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional guidance to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting.  The objective of the guidance in Topic 848 is to provide relief during the temporary transition period, so the FASB included a sunset provision within Topic 848 based on expectations of when the London Interbank Offered Rate (“LIBOR”) would cease being published.  The amendments in ASU No. 2020-04 provide optional guidance for a limited time to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting and provide optional expedients and exceptions for applying generally accepted accounting principles (“GAAP”) to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met.  This ASU applies only to contracts and hedging relationships that reference LIBOR or another reference rate expected to be discontinued due to reference rate reform.  The expedients and exceptions provided by the amendments do not apply to contract modifications made and hedging relationships entered into or evaluated after December 31, 2022.  In 2021, the UK Financial Conduct Authority delayed the intended cessation date of certain tenors of USD LIBOR to June 30, 2023. To ensure the relief in Topic 848 covers the period of time during which a significant number of modifications may take place, ASU No. 2022-06 defers the sunset date of Topic 848 from December 31, 2022, to December 31, 2024, after which entities will no longer be permitted to apply the relief in Topic 848.  At this time, we do not anticipate any material adverse impact to our business operation or financial results during the period of transition.

➢       Troubled Debt Restructurings and Vintage Disclosures – In February 2022, the FASB issued ASU 2022-02, Financial Instruments – Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures.  The amendments in this ASU eliminate the accounting guidance for troubled debt restructurings (“TDRs”) by creditors in Subtopic 310-40, Receivables—Troubled Debt Restructurings by Creditors, while enhancing disclosure requirements for certain loan refinancings and restructurings by creditors when a borrower is experiencing financial difficulty.  Specifically, rather than applying the recognition and measurement guidance for TDRs, an entity must apply the loan refinancing and restructuring guidance in paragraphs 310-20-35-9 through 35-11 to determine whether a modification results in a new loan or a continuation of an existing loan.   Additionally, for public business entities, the amendments in this ASU require that an entity disclose current-period gross write-offs by year of origination for financing receivables and net investments in leases within the scope of Subtopic 326-20, Financial Instruments—Credit Losses—Measured at Amortized Cost, in the vintage disclosures required by paragraph 326-20-50-6.  The amendments in the ASU have been implemented and did not have a  significant impact to our consolidated financial statements.

➢       Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions – In June 2022, the FASB issued ASU 2022-03, Fair Value Measurement Topic 820: Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions.  The FASB issued this ASU to (1) clarify the guidance in Topic 820, Fair Value Measurement, when measuring the fair value of an equity security subject to contractual restrictions that prohibit the sale of an equity security, (2) amend a related illustrative example, and (3) introduce new disclosure requirements for equity securities subject to contractual sale restrictions that are measured at fair value in accordance with Topic 820.  The amendments in this ASU clarify that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, is not considered in measuring fair value.  The amendments also clarify that an entity cannot, as a separate unit of account, recognize and measure a contractual sale restriction.  The amendments in this ASU also require the following disclosures for equity securities subject to contractual sale restrictions: (1) the fair value of equity securities subject to contractual sale restrictions reflected in the balance sheet; (2) the nature and remaining duration of the restriction(s); and (3) the circumstances that could cause a lapse in the restriction(s).  For public business entities, the amendments in this ASU are effective for fiscal years beginning after December 15, 2023, and interim periods within those fiscal years.  Early adoption is permitted for both interim and annual financial statements that have not yet been issued or made available for issuance. We do not anticipate a significant impact to our consolidated financial statements.

            ➢         FASB Improves the Accounting for Investments in Tax Credit Structures – The FASB issued, ASU No. 2023-02, Investments—Equity Method and Joint Ventures (Topic 323): Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method, which is intended to improve the accounting and disclosures for investments in tax credit structures. This ASU is a consensus of the FASB’s Emerging Issues Task Force (EITF).  This ASU allows reporting entities to elect to account for qualifying tax equity investments using the proportional amortization method, regardless of the program giving rise to the related income tax credits. This ASU responds to stakeholder feedback that the proportional amortization method provides investors and other allocators of capital with a better understanding of the returns from investments that are made primarily for the purpose of receiving income tax credits and other income tax benefits.  Reporting entities were previously permitted to apply the proportional amortization method only to qualifying tax equity investments in low-income housing tax credit (“LIHTC”) structures. In recent years, stakeholders asked the FASB to extend the application of the proportional amortization method to qualifying tax equity investments that generate tax credits through other programs, which resulted in the EITF addressing this issue.  For public business entities, the amendments are effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2024, including interim periods within those fiscal years. Early adoption is permitted for all entities in any interim period; however, we do not plan to early adopt. We do not anticipate a significant impact to our consolidated financial statements.

Significant Accounting Policies

Significant Accounting Policies –

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 our 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 significant accounting policies:

Investments

➢        Investments – Management determines the classification of securities at purchase.  We classify debt securities into held-to-maturity, trading, or available-for-sale categories.  Held-to-maturity (“HTM”) securities are those which we have the positive intent and ability to hold to maturity and are reported at amortized cost.  In accordance with FASB Accounting Standards Codification (“ASC”) 320, Investments – Debt Securities, investments in debt securities that are not classified as held-to-maturity 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 HTM securities) shall be classified as available-for-sale (“AFS”) securities.

We do not have any securities that are classified as trading securities.  AFS 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.

For AFS debt securities in an unrealized loss position, we evaluate the securities to determine whether the decline in the fair value below the amortized cost basis (impairment) is due to credit-related factors or non-credit related factors.  Any impairment that is not credit-related is recognized in accumulated other comprehensive income, net of tax.  Credit-related impairment is recognized as an allowance for credit losses (“ACL”) for AFS debt securities on the balance sheet, limited to the amount by which the amortized cost basis exceeds the fair value, with a corresponding adjustment to earnings.  Accrued interest receivable on AFS debt securities is excluded from the estimate of credit losses.  Both the ACL for AFS debt securities and the adjustment to net income may be reversed if conditions change.  However, if we intend to sell an impaired AFS debt security or more likely than not will be required to sell such a security before recovering its amortized cost basis, the entire impairment amount would be recognized in earnings with a corresponding adjustment to the security’s amortized cost basis.  Because the security’s amortized cost basis is adjusted to fair value, there is no ACL for AFS debt securities in this situation.

In evaluating AFS debt securities in unrealized loss positions for impairment and the criteria regarding its intent or requirement to sell such securities, we consider the extent to which fair value is less than amortized cost, whether the securities are issued by the federal government or its agencies, whether downgrades by bond rating agencies have occurred, and the results of reviews of the issuers’ financial condition, among other factors.  There were no credit related factors underlying unrealized losses on AFS debt securities at June 30, 2023 and December 31, 2022, therefore, no ACL for AFS securities was recorded.

Changes in the ACL for AFS debt securities are recorded as expense.  Losses are charged against the ACL for AFS debt securities when management believes the uncollectability of an AFS debt security is confirmed or when either of the criteria regarding intent or requirement to sell is met.

Gains or losses on disposition of debt securities are computed by specific identification for those securities.  Interest and dividend income, adjusted by amortization of purchase premium or discount, is included in earnings.

HTM securities are subject to an allowance for lifetime expected credit losses, determined by adjusting historical loss information for current conditions and reasonable and supportable forecasts.  The forward-looking evaluation of lifetime expected losses will be performed on a pooled basis for debt securities that share similar risk characteristics.  These allowances for expected losses must be made by the holder of the HTM debt security when the security is purchased.  At June 30, 2023 and 2022, CTBI held no securities designated as HTM.

CTBI accounts for equity securities in accordance with ASC 321, Investments – Equity Securities. ASC 321 requires equity investments (except those accounted for under the equity method and those that result in the consolidation of the investee) to be measured at fair value, with changes in fair values recognized in net income.

Equity securities with a readily determinable fair value are required to be measured at fair value, with changes in fair value recognized in net income.  Equity securities without a readily determinable fair value are carried at cost, less any impairment, if any, plus or minus changes resulting from observable price changes for identical or similar investments.  As permitted by ASC 321-10-35-2, CTBI can make an irrevocable election to subsequently measure an equity security without a readily determinable fair value, and all identical or similar investments of the same issuer, including future purchases of identical or similar investments of the same issuer, at fair value.  CTBI has made this election for our Visa Class B equity securities.  The fair value of these securities was determined by a third party service provider using Level 3 inputs as defined in ASC 820, Fair Value Measurement, and changes in fair value are recognized in income.

Loans

➢        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 credit losses, and unamortized deferred fees or costs and premiums.  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. With the implementation of ASU 2022-02 described above in the New Accountings Standards, TDRs have been eliminated while enhanced disclosure requirements have been implemented for certain loan modifications when a borrower is experiencing financial difficulty.

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, or commitments as a yield adjustment.

Allowance for Credit Losses

➢        Allowance for Credit Losses – CTBI accounts for the allowance for credit losses under ASC 326. CTBI measures expected credit losses of financial assets on a collective (pool) basis using loss-rate methods when the financial assets share similar risk characteristics. Loans that do not share risk characteristics are evaluated on an individual basis. Regardless of an initial measurement method, once it is determined that foreclosure is probable, the allowance for credit losses is measured based on the fair value of the collateral as of the measurement date. As a practical expedient, the fair value of the collateral may be used for a loan when determining the allowance for credit losses for which the repayment is expected to be provided substantially through the operation or sale of the collateral when the borrower is experiencing financial difficulty. The fair value shall be adjusted for selling costs when foreclosure is probable. For collateral-dependent financial assets, the credit loss expected may be zero if the fair value less costs to sell exceed the amortized cost of the loan. Loans shall not be included in both collective assessments and individual assessments.

In the event that collection of principal becomes uncertain, CTBI has policies in place to reverse accrued interest in a timely manner. Therefore, CTBI elected  ASU 2019-04 which allows that accrued interest would continue to be presented separately and not part of the amortized cost of the loan. The methodology used by CTBI is developed using the current loan balance, which is then compared to amortized cost balances to analyze the impact. The difference in amortized cost basis versus consideration of loan balances impacts the allowance for credit losses calculation by 1 basis point and is considered immaterial. The primary difference is for indirect lending premiums.

We maintain an ACL at a level that is appropriate to cover estimated credit losses on individually evaluated loans, as well as estimated credit losses inherent in the remainder of the loan and lease portfolio.  Credit losses are charged and recoveries are credited to the ACL.

We utilize an internal risk grading system for commercial credits. Those credits that meet the following criteria are subject to individual evaluation: the loan has an outstanding bank share balance of $1 million or greater and has a criticized risk rating and meets one of the following criteria: (i) is in nonaccrual status, (ii) the borrower is experiencing financial difficulty with significant payment delay, or (iii) is 90 days or more past due. The borrower’s cash flow, adequacy of collateral coverage, and other options available to CTBI, including legal remedies, are evaluated. 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 loan segments not subject to individual evaluation.

Homogenous loans, such as consumer installment, residential mortgages, and home equity lines are not individually risk graded.  The associated ACL for these loans is measured in pools with similar risk characteristics under ASC 326.

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 nonaccrual and the loan is charged down to the value of the collateral less estimated cost to sell. For commercial loans greater than $1 million that are categorized as individually evaluated based on the criteria listed above, a specific reserve is established if a loss is determined to be possible and then charged-off once it is probable. When the foreclosed collateral has been legally assigned to CTBI, the estimated fair value of the collateral less costs to sell is then transferred to other real estate owned or other repossessed assets, and a charge-off is taken for any remaining balance.  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 (five 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.

Prior to June 30, 2023, loss rate methodologies were used by CTBI.  Weighted average life calculations were completed as a tool to determine the life of CTBI’s various loan segments.  Vintage modeling was used to determine the life of loan losses for consumer and residential real estate loans, and static pool modeling was used to determine the life of loan losses for commercial loan segments.  Historical loss rates for loans were adjusted for significant factors that, in management’s judgment, reflect the impact of any current conditions on loss recognition.  Forecasting factors including unemployment rates and industry specific forecasts for industries in which our total exposure is 5% of capital or greater were also included as factors in the ACL model.

During the quarter ended June 30, 2023, CTBI implemented third party software and the determination was made to utilize discounted cash flow loss rate methodologies for all loan segments.  Within the discount cash flow calculation, an effective yield of the instrument is calculated, net of the impacts of prepayment assumptions, and the instrument expected cash flows, modeled considering probability of default (PD) and segment-specific loss given default (LGD) risk factors, are then discounted at that effective yield to produce an instrument-level net present value (NPV) of expected cash flows.  An allowance for credit loss is established for the difference between the instrument’s NPV and amortized cost basis.  Any changes in NPV between periods is recorded as provision for credit losses.  The modeling of expected prepayment speeds, curtailment rates, and time to recovery are based on historical internal data and adjusted, if necessary, based on the reasonable and supportable forecast of economic conditions.  Management incorporates qualitative factors to loss estimates used to derive CTBI’s total ACL including delinquency trends, current economic conditions and trends, strength of supervision and administration of the loan portfolio, levels of underperforming loans, and underwriting exceptions.  Forecast factors were expanded to include gross domestic product, retail and food service sales, and S&P/Case-Shiller US National Home Price Index, while industry concentrations was added as a qualitative factor.  Management continually reevaluates the other subjective factors included in our ACL analysis.

Goodwill and Core Deposit Intangible

➢        Goodwill and Core Deposit Intangible – We evaluate total goodwill and core deposit intangible for impairment, based upon ASC 350, Intangibles-Goodwill and Other, using fair value techniques including multiples of price/equity.  Goodwill and core deposit intangible are evaluated for impairment on an annual basis or as other events may warrant.

The balance of goodwill, at $65.5 million, has not changed since January 1, 2015.

Income Taxes

➢        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 our consolidated financial statements. During the six months ended June 30, 2023 and 2022, CTBI has not recognized a significant amount of interest expense or penalties in connection with income taxes.

Estimated Credit Losses on Off-Balance Sheet Credit Exposures Recognized as Other Liabilities

➢        Estimated Credit Losses on Off-Balance Sheet Credit Exposures Recognized as Other Liabilities – CTBI estimates expected credit losses over the contractual period in which it has exposure to credit risk via a contractual obligation to extend credit, unless that obligation is unconditionally cancellable by CTBI.  The allowance for credit losses on off-balance sheet credit exposures recognized in other liabilities, is adjusted as an expense in other non-interest expense. The estimate includes consideration of the likelihood that funding will occur and an estimate of expected credit losses on commitments expected to be funded over their estimated lives.  Estimating credit losses on unfunded commitments requires CTBI to consider the following categories of off-balance sheet credit exposure: unfunded commitments to extend credit, unfunded lines of credit, and standby letters of credit.  Each of these unfunded commitments is then analyzed for a probability of funding to calculate a probable funding amount.  The life of loan loss factor by related portfolio segment from the loan allowance for credit loss calculation is then applied to the probable funding amount to calculate the estimated credit losses on off-balance sheet credit exposures recognized as other liabilities.

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Securities (Tables)

6 Months Ended

Jun. 30, 2023

Securities [Abstract]

Amortized Cost and Fair Value of Available-for-sale Securities

The amortized cost and fair value of debt securities at June 30, 2023 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	$	400,148	$	143	$	(34,897	)	$	365,394
State and political subdivisions		314,048		2		(54,225	)		259,825
U.S. government sponsored agency mortgage-backed securities		558,964		1		(71,066	)		487,899
Asset-backed securities		89,588		0		(1,453	)		88,135
Total available-for-sale securities	$	1,362,748	$	146	$	(161,641	)	$	1,201,253

The amortized cost and fair value of debt securities at December 31, 2022 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	$	418,579	$	212	$	(36,859	)	$	381,932
State and political subdivisions		326,746		32		(61,676	)		265,102
U.S. government sponsored agency mortgage-backed securities		593,917		1		(73,833	)		520,085
Asset-backed securities		91,363		0		(2,256	)		89,107
Total available-for-sale securities	$	1,430,605	$	245	$	(174,624	)	$	1,256,226

Amortized Cost and Fair Value of Debt Securities by Contractual Maturity

The amortized cost and fair value of debt securities at June 30, 2023 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	$	33,089	$	32,613
Due after one through five years		336,248		305,693
Due after five through ten years		169,173		145,760
Due after ten years		175,686		141,153
U.S. government sponsored agency mortgage-backed securities		558,964		487,899
Asset-backed securities		89,588		88,135
Total debt securities	$	1,362,748	$	1,201,253

Available for Sale Securities and Held-to-Maturity Securities, Continuous Unrealized Loss Position

CTBI evaluates its investment portfolio on a quarterly basis for impairment.  The analysis performed as of June 30, 2023 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 June 30, 2023 was 98.7% compared to 97.4% as of December 31, 2022.  The following table provides the amortized cost, gross unrealized losses, and fair value, aggregated by investment category and length of time the individual securities have been in a continuous unrealized loss position as of June 30, 2023 that are not deemed to have credit losses.  As stated above, CTBI had no HTM securities as of June 30, 2023.

Available-for-Sale

(in thousands)	Amortized Cost		Gross Unrealized Losses			Fair Value
Less Than 12 Months
U.S. Treasury and government agencies	$	7,188	$	(10	)	$	7,178
State and political subdivisions		34,386		(1,493	)		32,893
U.S. government sponsored agency mortgage-backed securities		51,640		(1,806	)		49,834
Asset-backed securities		0		0			0
Total <12 months temporarily impaired AFS securities		93,214		(3,309	)		89,905
12 Months or More
U.S. Treasury and government agencies		380,143		(34,887	)		345,256
State and political subdivisions		277,291		(52,732	)		224,559
U.S. government sponsored agency mortgage-backed securities		507,278		(69,260	)		438,018
Asset-backed securities		89,588		(1,453	)		88,135
Total ≥12 months temporarily impaired AFS securities		1,254,300		(158,332	)		1,095,968
Total
U.S. Treasury and government agencies		387,331		(34,897	)		352,434
State and political subdivisions		311,677		(54,225	)		257,452
U.S. government sponsored agency mortgage-backed securities		558,918		(71,066	)		487,852
Asset-backed securities		89,588		(1,453	)		88,135
Total temporarily impaired AFS securities	$	1,347,514	$	(161,641	)	$	1,185,873

The analysis performed as of December 31, 2022 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 value, aggregated by investment category and length of time the individual securities have been in a continuous unrealized loss position as of December 31, 2022 that are not deemed to be other-than-temporarily impaired.  As stated above, CTBI had no HTM securities as of December 31, 2022.

Available-for-Sale

(in thousands)	Amortized Cost		Gross Unrealized Losses			Fair Value
Less Than 12 Months
U.S. Treasury and government agencies	$	144,305	$	(6,953	)	$	137,352
State and political subdivisions		94,277		(6,257	)		88,020
U.S. government sponsored agency mortgage-backed securities		139,314		(6,883	)		132,431
Asset-backed securities		38,882		(1,231	)		37,651
Total <12 months temporarily impaired AFS securities		416,778		(21,324	)		395,454
12 Months or More
U.S. Treasury and government agencies		249,424		(29,906	)		219,518
State and political subdivisions		225,019		(55,419	)		169,600
U.S. government sponsored agency mortgage-backed securities		454,357		(66,950	)		387,407
Asset-backed securities		52,480		(1,025	)		51,455
Total ≥12 months temporarily impaired AFS securities		981,280		(153,300	)		827,980
Total
U.S. Treasury and government agencies		393,729		(36,859	)		356,870
State and political subdivisions		319,296		(61,676	)		257,620
U.S. government sponsored agency mortgage-backed securities		593,671		(73,833	)		519,838
Asset-backed securities		91,362		(2,256	)		89,106
Total temporarily impaired AFS securities	$	1,398,058	$	(174,624	)	$	1,223,434

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Loans (Tables)

6 Months Ended

Jun. 30, 2023

Loans [Abstract]

Major Classification of Loans Net of Unearned Income, Deferred Loan Origination Costs and Net Premiums on Acquired Loans

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

(in thousands)	June 30 2023		December 31 2022
Hotel/motel	$	372,981	$	343,640
Commercial real estate residential		393,309		372,914
Commercial real estate nonresidential		787,598		762,349
Dealer floorplans		76,903		77,533
Commercial other		319,838		312,422
Commercial loans		1,950,629		1,868,858
Real estate mortgage		883,104		824,996
Home equity lines		132,033		120,540
Residential loans		1,015,137		945,536
Consumer direct		157,848		157,504
Consumer indirect		806,081		737,392
Consumer loans		963,929		894,896
Loans and lease financing	$	3,929,695	$	3,709,290

Shift in Reserve Estimates Due to Change in Modeling

During the quarter ended June 30, 2023, CTBI implemented third party software for its ACL calculations.  During the implementation process, discounted cash flow modeling was chosen for all loan segments.  The primary reasons that contributed to this decision were:  Discounted cash flow (“DCF”) models allow for the effective incorporation of a reasonable and supportable forecast in a directionally consistent and objective manner; the analysis aligns well with other calculations outside of the ACL estimation which will mitigate model risk in other areas; and peer data is available for certain inputs if first -party data is not available or meaningful.  This change in modeling resulted in a shift in our reserve estimates as of June 30, 2023 as presented below:

(in thousands)	ACL Software June 30, 2023		CTBI Internal ACL Model June 30, 2023		Change in Allocation
Hotel/motel	$	5,192	$	6,038	$	(846	)
Commercial real estate residential		3,749		4,669		(920	)
Commercial real estate nonresidential		7,797		8,794		(997	)
Dealer floorplans		1,157		1,719		(562	)
Commercial other		6,176		4,547		1,629
Commercial loans reserve allocation		24,071		25,767		(1,696	)
Real estate mortgage		7,884		8,443		(559	)
Home equity lines		1,108		1,065		43
Residential loans reserve allocation		8,992		9,508		(516	)
Consumer direct		2,563		1,673		890
Consumer indirect		12,392		10,959		1,433
Consumer loans reserve allocation		14,955		12,632		2,323
Loans and lease financing allowance for credit loss	$	48,018		47,907	$	111

Balance in ACL

The following tables present the balance in the ACL for the periods ended June 30, 2023, December 31, 2022, and June 30, 2022:

	Three Months Ended June 30, 2023
(in thousands)	Beginning Balance		Provision Charged to Expense			Losses Charged Off			Recoveries		Ending Balance
ACL
Hotel/motel	$	5,287	$	(95	)	$	0		$	0	$	5,192
Commercial real estate residential		5,157		(1,384	)		(28	)		4		3,749
Commercial real estate nonresidential		9,010		(1,393	)		(9	)		189		7,797
Dealer floorplans		1,694		(537	)		0			0		1,157
Commercial other		4,782		2,387			(1,073	)		80		6,176
Real estate mortgage		7,917		10			(55	)		12		7,884
Home equity		1,044		76			(13	)		1		1,108
Consumer direct		1,746		807			(82	)		92		2,563
Consumer indirect		10,046		2,138			(693	)		901		12,392
Total	$	46,683	$	2,009		$	(1,953	)	$	1,279	$	48,018

	Six Months Ended June 30, 2023
(in thousands)	Beginning Balance		Provision Charged to Expense			Losses Charged Off			Recoveries		Ending Balance
ACL
Hotel/motel	$	5,171	$	21		$	0		$	0	$	5,192
Commercial real estate residential		4,894		(1,198	)		(28	)		81		3,749
Commercial real estate nonresidential		9,419		(1,946	)		(9	)		333		7,797
Dealer floorplans		1,776		(619	)		0			0		1,157
Commercial other		5,285		1,971			(1,260	)		180		6,176
Real estate mortgage		7,932		31			(95	)		16		7,884
Home equity		1,106		12			(13	)		3		1,108
Consumer direct		1,694		912			(238	)		195		2,563
Consumer indirect		8,704		3,941			(2,075	)		1,822		12,392
Total	$	45,981	$	3,125		$	(3,718	)	$	2,630	$	48,018

	Year Ended December 31, 2022
(in thousands)	Beginning Balance		Provision Charged to Expense			Losses Charged Off			Recoveries		Ending Balance
ACL
Hotel/motel	$	5,080	$	307		$	(216	)	$	0	$	5,171
Commercial real estate residential		3,986		951			(92	)		49		4,894
Commercial real estate nonresidential		8,884		(154	)		(46	)		735		9,419
Dealer floorplans		1,436		340			0			0		1,776
Commercial other		4,422		947			(1,082	)		998		5,285
Real estate mortgage		7,637		466			(223	)		52		7,932
Home equity		866		257			(37	)		20		1,106
Consumer direct		1,951		(210	)		(609	)		562		1,694
Consumer indirect		7,494		2,001			(3,041	)		2,250		8,704
Total	$	41,756	$	4,905		$	(5,346	)	$	4,666	$	45,981

	Three Months Ended June 30, 2022
(in thousands)	Beginning Balance		Provision Charged to Expense			Losses Charged Off			Recoveries		Ending Balance
ACL
Hotel/motel	$	4,711	$	133		$	0		$	0	$	4,844
Commercial real estate residential		4,070		124			0			6		4,200
Commercial real estate nonresidential		9,169		(223	)		0			22		8,968
Dealer floorplans		1,519		(42	)		0			0		1,477
Commercial other		4,844		(285	)		(187	)		101		4,473
Real estate mortgage		7,662		586			(84	)		15		8,179
Home equity		819		71			(5	)		2		887
Consumer direct		1,787		(65	)		(175	)		74		1,621
Consumer indirect		7,728		(222	)		(377	)		566		7,695
Total	$	42,309	$	77		$	(828	)	$	786	$	42,344

	Six Months Ended June 30, 2022
(in thousands)	Beginning Balance		Provision Charged to Expense			Losses Charged Off			Recoveries		Ending Balance
ACL
Hotel/motel	$	5,080	$	(20	)	$	(216	)	$	0	$	4,844
Commercial real estate residential		3,986		234			(31	)		11		4,200
Commercial real estate nonresidential		8,884		(49	)		0			133		8,968
Dealer floorplans		1,436		41			0			0		1,477
Commercial other		4,422		193			(344	)		202		4,473
Real estate mortgage		7,637		683			(177	)		36		8,179
Home equity		866		38			(24	)		7		887
Consumer direct		1,951		(245	)		(345	)		260		1,621
Consumer indirect		7,494		77			(1,011	)		1,135		7,695
Total	$	41,756	$	952		$	(2,148	)	$	1,784	$	42,344

Nonaccrual Loans Segregated by Class of Loans

Refer to Note 1 to the condensed consolidated financial statements for further information regarding our nonaccrual policy.  Nonaccrual loans and loans 90 days past due and still accruing segregated by class of loans for both June 30, 2023 and December 31, 2022 were as follows:

	June 30, 2023
(in thousands)	Nonaccrual Loans with No ACL		Nonaccrual Loans with ACL		90+ and Still Accruing		Total Nonperforming Loans
Hotel/motel	$	0	$	0	$	0	$	0
Commercial real estate residential		0		322		712		1,034
Commercial real estate nonresidential		0		982		300		1,282
Commercial other		0		753		277		1,030
Total commercial loans		0		2,057		1,289		3,346
Real estate mortgage		0		3,093		4,206		7,299
Home equity lines		0		195		459		654
Total residential loans		0		3,288		4,665		7,953
Consumer direct		0		0		6		6
Consumer indirect		0		0		439		439
Total consumer loans		0		0		445		445
Loans and lease financing	$	0	$	5,345	$	6,399	$	11,744

	December 31, 2022
(in thousands)	Nonaccrual Loans with No ACL		Nonaccrual Loans with ACL		90+ and Still Accruing		Total Nonperforming Loans
Hotel/motel	$	0	$	0	$	0	$	0
Commercial real estate residential		0		355		258		613
Commercial real estate nonresidential		0		1,116		1,947		3,063
Commercial other		0		982		369		1,351
Total commercial loans		0		2,453		2,574		5,027
Real estate mortgage		0		4,069		4,929		8,998
Home equity lines		0		291		487		778
Total residential loans		0		4,360		5,416		9,776
Consumer direct		0		0		41		41
Consumer indirect		0		0		465		465
Total consumer loans		0		0		506		506
Loans and lease financing	$	0	$	6,813	$	8,496	$	15,309

Bank's Loan Portfolio Aging Analysis, Segregated by Class

The following tables present CTBI’s loan portfolio aging analysis, segregated by class, as of June 30, 2023 and December 31, 2022 (includes loans 90 days past due and still accruing as well):

	June 30, 2023
(in thousands)	30-59 Days Past Due		60-89 Days Past Due		90+ Days Past Due		Total Past Due		Current		Total Loans
Hotel/motel	$	0	$	0	$	0	$	0	$	372,981	$	372,981
Commercial real estate residential		152		279		1,000		1,431		391,878		393,309
Commercial real estate nonresidential		1,101		110		940		2,151		785,447		787,598
Dealer floorplans		0		0		0		0		76,903		76,903
Commercial other		1,062		330		694		2,086		317,752		319,838
Total commercial loans		2,315		719		2,634		5,668		1,944,961		1,950,629
Real estate mortgage		1,440		2,528		6,220		10,188		872,916		883,104
Home equity lines		733		435		490		1,658		130,375		132,033
Total residential loans		2,173		2,963		6,710		11,846		1,003,291		1,015,137
Consumer direct		557		95		6		658		157,190		157,848
Consumer indirect		3,147		865		439		4,451		801,630		806,081
Total consumer loans		3,704		960		445		5,109		958,820		963,929
Loans and lease financing	$	8,192	$	4,642	$	9,789	$	22,623	$	3,907,072	$	3,929,695

	December 31, 2022
(in thousands)	30-59 Days Past Due		60-89 Days Past Due		90+ Days Past Due		Total Past Due		Current		Total Loans
Hotel/motel	$	0	$	0	$	0	$	0	$	343,640	$	343,640
Commercial real estate residential		602		225		574		1,401		371,513		372,914
Commercial real estate nonresidential		2,549		395		2,611		5,555		756,794		762,349
Dealer floorplans		0		0		0		0		77,533		77,533
Commercial other		1,029		850		496		2,375		310,047		312,422
Total commercial loans		4,180		1,470		3,681		9,331		1,859,527		1,868,858
Real estate mortgage		869		3,402		7,067		11,338		813,658		824,996
Home equity lines		786		44		740		1,570		118,970		120,540
Total residential loans		1,655		3,446		7,807		12,908		932,628		945,536
Consumer direct		555		126		41		722		156,782		157,504
Consumer indirect		4,407		764		465		5,636		731,756		737,392
Total consumer loans		4,962		890		506		6,358		888,538		894,896
Loans and lease financing	$	10,797	$	5,806	$	11,994	$	28,597	$	3,680,693	$	3,709,290

Credit Risk Profile of the Bank's Commercial Loan Portfolio Based on Rating Category and Payment Activity, Segregated by Class of Loans

The following tables present the credit risk profile of CTBI’s commercial loan portfolio based on rating category and payment activity, as well as gross charge-offs year to date, if any, segregated by class of loans and based on last credit decision or year of origination:

June 30, 2023	Term Loans Amortized Cost Basis by Origination Year
(in thousands)	2023			2022			2021			2020			2019			Prior			Revolving Loans		Total
Hotel/motel
Risk rating:
Pass	$	38,210		$	150,521		$	28,454		$	17,968		$	47,039		$	47,091		$	4,043	$	333,326
Watch		2,949			6,957			8,873			4,709			3,412			3,871			0		30,771
OAEM		0			0			6,971			0			0			1,913			0		8,884
Substandard		0			0			0			0			0			0			0		0
Doubtful		0			0			0			0			0			0			0		0
Total hotel/motel		41,159			157,478			44,298			22,677			50,451			52,875			4,043		372,981
Commercial real estate residential
Risk rating:
Pass		55,238			104,912			104,205			35,701			12,921			41,206			14,132		368,315
Watch		753			1,010			835			1,948			743			7,367			144		12,800
OAEM		0			0			0			0			0			65			0		65
Substandard		286			617			4,295			623			289			6,019			0		12,129
Doubtful		0			0			0			0			0			0			0		0
Total commercial real estate residential		56,277			106,539			109,335			38,272			13,953			54,657			14,276		393,309
Commercial real estate residential current period gross charge-offs		0			0			(28	)		0			0			0			0		(28	)
Commercial real estate nonresidential
Risk rating:
Pass		81,927			153,561			152,539			79,949			66,557			166,883			25,508		726,924
Watch		300			3,966			6,499			9,716			7,618			6,710			711		35,520
OAEM		2,375			19			0			0			0			74			0		2,468
Substandard		1,370			1,439			2,522			4,543			3,096			9,701			0		22,671
Doubtful		0			0			0			0			0			15			0		15
Total commercial real estate nonresidential		85,972			158,985			161,560			94,208			77,271			183,383			26,219		787,598
Commercial real estate nonresidential current period gross charge-offs		0			0			0			(9	)		0			0			0		(9	)
Dealer floorplans
Risk rating:
Pass		0			0			0			0			0			0			76,903		76,903
Watch		0			0			0			0			0			0			0		0
OAEM		0			0			0			0			0			0			0		0
Substandard		0			0			0			0			0			0			0		0
Doubtful		0			0			0			0			0			0			0		0
Total dealer floorplans		0			0			0			0			0			0			76,903		76,903
Commercial other
Risk rating:
Pass		41,105			60,219			54,817			31,984			6,523			24,483			78,670		297,801
Watch		541			1,390			980			156			334			771			5,990		10,162
OAEM		0			30			0			0			0			0			30		60
Substandard		466			4,216			4,807			943			219			564			600		11,815
Doubtful		0			0			0			0			0			0			0		0
Total commercial other		42,112			65,855			60,604			33,083			7,076			25,818			85,290		319,838
Commercial other current period gross charge-offs		(321	)		(632	)		(154	)		(17	)		(90	)		(46	)		0		(1,260	)
Commercial loans
Risk rating:
Pass		216,480			469,213			340,015			165,602			133,040			279,663			199,256		1,803,269
Watch		4,543			13,323			17,187			16,529			12,107			18,719			6,845		89,253
OAEM		2,375			49			6,971			0			0			2,052			30		11,477
Substandard		2,122			6,272			11,624			6,109			3,604			16,284			600		46,615
Doubtful		0			0			0			0			0			15			0		15
Total commercial loans	$	225,520		$	488,857		$	375,797		$	188,240		$	148,751		$	316,733		$	206,731	$	1,950,629
Total commercial loans current period gross charge-offs	$	(321	)	$	(632	)	$	(182	)	$	(26	)	$	(90	)	$	(46	)	$	0	$	(1,297	)

December 31, 2022	Term Loans Amortized Cost Basis by Origination Year
(in thousands)	2022		2021		2020		2019		2018		Prior		Revolving Loans		Total
Hotel/motel
Risk rating:
Pass	$	145,262	$	36,002	$	17,742	$	54,328	$	13,178	$	35,179	$	545	$	302,236
Watch		7,921		8,996		5,523		3,453		0		13,555		0		39,448
OAEM		0		0		0		0		0		1,956		0		1,956
Substandard		0		0		0		0		0		0		0		0
Doubtful		0		0		0		0		0		0		0		0
Total hotel/motel		153,183		44,998		23,265		57,781		13,178		50,690		545		343,640
Commercial real estate residential
Risk rating:
Pass		119,826		110,963		38,423		15,467		10,492		36,307		14,297		345,775
Watch		1,474		898		1,675		848		2,136		7,015		152		14,198
OAEM		0		0		0		39		0		0		29		68
Substandard		182		4,289		1,878		346		3,639		2,539		0		12,873
Doubtful		0		0		0		0		0		0		0		0
Total commercial real estate residential		121,482		116,150		41,976		16,700		16,267		45,861		14,478		372,914
Commercial real estate nonresidential
Risk rating:
Pass		175,220		171,311		80,932		70,848		44,099		137,575		23,166		703,151
Watch		3,331		5,765		10,090		2,178		1,962		10,022		1,550		34,898
OAEM		19		0		0		0		0		90		0		109
Substandard		1,939		2,537		4,877		3,135		508		10,865		25		23,886
Doubtful		0		0		0		0		0		305		0		305
Total commercial real estate nonresidential		180,509		179,613		95,899		76,161		46,569		158,857		24,741		762,349
Dealer floorplans
Risk rating:
Pass		0		0		0		0		0		0		77,153		77,153
Watch		0		0		0		0		0		0		380		380
OAEM		0		0		0		0		0		0		0		0
Substandard		0		0		0		0		0		0		0		0
Doubtful		0		0		0		0		0		0		0		0
Total dealer floorplans		0		0		0		0		0		0		77,533		77,533
Commercial other
Risk rating:
Pass		78,846		60,550		34,841		8,922		2,333		23,961		77,355		286,808
Watch		1,622		393		604		217		159		780		6,402		10,177
OAEM		30		0		0		0		0		0		30		60
Substandard		6,090		5,489		885		356		143		758		952		14,673
Doubtful		466		129		0		109		0		0		0		704
Total commercial other		87,054		66,561		36,330		9,604		2,635		25,499		84,739		312,422
Commercial loans
Risk rating:
Pass		519,154		378,826		171,938		149,565		70,102		233,022		192,516		1,715,123
Watch		14,348		16,052		17,892		6,696		4,257		31,372		8,484		99,101
OAEM		49		0		0		39		0		2,046		59		2,193
Substandard		8,211		12,315		7,640		3,837		4,290		14,162		977		51,432
Doubtful		466		129		0		109		0		305		0		1,009
Total commercial loans	$	542,228	$	407,322	$	197,470	$	160,246	$	78,649	$	280,907	$	202,036	$	1,868,858

Credit Risk Profile of Residential Real Estate and Consumer Loan Portfolio Based on Performing and Nonperforming Status Segregated by Class

The following tables present the credit risk profile of CTBI’s residential real estate and consumer loan portfolios based on performing or nonperforming status, segregated by class:

June 30, 2023	Term Loans Amortized Cost Basis by Origination Year
(in thousands)	2023			2022			2021			2020			2019			Prior			Revolving Loans		Total
Home equity lines
Performing	$	0		$	0		$	0		$	0		$	0		$	9,047		$	122,332	$	131,379
Nonperforming		0			0			0			0			0			403			251		654
Total home equity lines		0			0			0			0			0			9,450			122,583		132,033
Home equity lines current period gross charge-offs																	(13	)		0		(13	)
Mortgage loans
Performing		96,372			175,566			169,481			125,782			59,375			249,229			0		875,805
Nonperforming		0			0			311			121			773			6,094			0		7,299
Total mortgage loans		96,372			175,566			169,792			125,903			60,148			255,323			0		883,104
Mortgage loans current period gross charge-offs		0			0			(47	)		0			(1	)		(47	)		0		(95	)
Residential loans
Performing		96,372			175,566			169,481			125,782			59,375			258,276			122,332		1,007,184
Nonperforming		0			0			311			121			773			6,497			251		7,953
Total residential loans	$	96,372		$	175,566		$	169,792		$	125,903		$	60,148		$	264,773		$	122,583	$	1,015,137
Total residential loans current period gross charge-offs	$	0		$	0		$	(47	)	$	0		$	(1	)	$	(60	)	$	0	$	(108	)
Consumer direct loans
Performing	$	35,168		$	45,893		$	33,307		$	19,215		$	9,082		$	15,177		$	0	$	157,842
Nonperforming		0			6			0			0			0			0			0		6
Total consumer direct loans		35,168			45,899			33,307			19,215			9,082			15,177			0		157,848
Total consumer direct loans current period gross charge-offs		0			(146	)		(42	)		(30	)		(14	)		(6	)		0		(238	)
Consumer indirect loans
Performing		217,355			306,664			136,812			90,812			33,856			20,143			0		805,642
Nonperforming		0			157			183			36			18			45			0		439
Total consumer indirect loans		217,355			306,821			136,995			90,848			33,874			20,188			0		806,081
Total consumer indirect loans current period gross charge-offs		(42	)		(785	)		(883	)		(217	)		(75	)		(73	)		0		(2,075	)
Consumer loans
Performing		252,523			352,557			170,119			110,027			42,938			35,320			0		963,484
Nonperforming		0			163			183			36			18			45			0		445
Total consumer loans	$	252,523		$	352,720		$	170,302		$	110,063		$	42,956		$	35,365		$	0	$	963,929
Total consumer loans current period gross charge-offs	$	(42	)	$	(931	)	$	(925	)	$	(247	)	$	(89	)	$	(79	)	$	0	$	(2,313	)

December 31, 2022	Term Loans Amortized Cost Basis by Origination Year
(in thousands)	2022		2021		2020		2019		2018		Prior		Revolving Loans		Total
Home equity lines
Performing	$	0	$	0	$	0	$	0	$	0	$	10,195	$	109,567	$	119,762
Nonperforming		0		0		0		0		0		502		276		778
Total home equity lines		0		0		0		0		0		10,697		109,843		120,540
Mortgage loans
Performing		176,736		177,469		132,795		62,415		30,473		236,110		0		815,998
Nonperforming		0		282		98		791		422		7,405		0		8,998
Total mortgage loans		176,736		177,751		132,893		63,206		30,895		243,515		0		824,996
Residential loans
Performing		176,736		177,469		132,795		62,415		30,473		246,305		109,567		935,760
Nonperforming		0		282		98		791		422		7,907		276		9,776
Total residential loans	$	176,736	$	177,751	$	132,893	$	63,206	$	30,895	$	254,212	$	109,843	$	945,536
Consumer direct loans
Performing	$	62,239	$	42,014	$	23,921	$	11,166	$	6,766	$	11,357	$	0	$	157,463
Nonperforming		25		11		5		0		0		0		0		41
Total consumer direct loans		62,264		42,025		23,926		11,166		6,766		11,357		0		157,504
Consumer indirect loans
Performing		371,079		168,513		116,267		45,748		26,247		9,073		0		736,927
Nonperforming		65		251		96		30		1		22		0		465
Total consumer indirect loans		371,144		168,764		116,363		45,778		26,248		9,095		0		737,392
Consumer loans
Performing		433,318		210,527		140,188		56,914		33,013		20,430		0		894,390
Nonperforming		90		262		101		30		1		22		0		506
Total consumer loans	$	433,408	$	210,789	$	140,289	$	56,944	$	33,014	$	20,452	$	0	$	894,896

Collateral Dependent Loans and Impaired Loans With/Without Specific Valuation Allowance

In accordance with ASC 326-20-30-2, if a loan does not share risk characteristics with other pooled loans in determining the allowance for credit losses, the loan shall be evaluated for expected credit losses on an individual basis. Of the loans that CTBI has individually evaluated, the loans listed below by segment are those that are collateral dependent:

	June 30, 2023
(in thousands)	Number of Loans		Recorded Investment		Specific Reserve
Hotel/motel		2	$	8,114	$	0
Commercial real estate residential		3		6,353		0
Commercial real estate nonresidential		6		11,704		0
Commercial other		2		6,585		0
Total collateral dependent loans		13	$	32,756	$	0

	December 31, 2022
(in thousands)	Number of Loans		Recorded Investment		Specific Reserve
Hotel/motel		1	$	1,168	$	0
Commercial real estate residential		4		7,786		0
Commercial real estate nonresidential		8		14,718		200
Commercial other		2		8,926		1,000
Total collateral dependent loans		15	$	32,598	$	1,200

	June 30, 2022
(in thousands)	Number of Loans		Recorded Investment		Specific Reserve
Hotel/motel		1	$	1,196	$	0
Commercial real estate residential		4		6,957		0
Commercial real estate nonresidential		10		18,218		200
Commercial other		3		10,190		550
Total collateral dependent loans		18	$	36,561	$	750

Modified Loans Segregated by Class of Loans and Concession Granted

Certain loans have been modified where the customer is facing financial difficulty and economic concessions were granted to borrowers consisting of reductions in the interest rates, payment extensions, forgiveness of principal, and forbearances.  Those loans, segregated by class of loans and concession granted, are presented below for the three months ended June 30, 2023:

	Interest Rate Reduction					Term Extension
(in thousands)	Amortized Cost at June 30, 2023		% of total			Amortized Cost at June 30, 2023		% of total
Hotel/motel	$	0		0.00	%	$	0		0.00	%
Commercial real estate residential		0		0.00			44		0.01
Commercial real estate nonresidential		73		0.01			13		0.00
Dealer floorplans		0		0.00			0		0.00
Commercial other		0		0.00			522		0.16
Commercial loans		73		0.00			579		0.03
Real estate mortgage		0		0.00			877		0.10
Home equity lines		0		0.00			0		0.00
Residential loans		0		0.00			877		0.09
Consumer direct		0		0.00			54		0.03
Consumer indirect		0		0.00			95		0.01
Consumer loans		0		0.00			149		0.02
Loans and lease financing	$	73		0.00	%	$	1,605		0.04	%

	Combination – Term Extension and Interest Rate Reduction					Payment Change
(in thousands)	Amortized Cost at June 30, 2023		% of total			Amortized Cost at June 30, 2023		% of total
Hotel/motel	$	0		0.00	%	$	0		0.00	%
Commercial real estate residential		0		0.00			0		0.00
Commercial real estate nonresidential		0		0.00			0		0.00
Dealer floorplans		0		0.00			0		0.00
Commercial other		0		0.00			300		0.09
Commercial loans		0		0.00			300		0.02
Real estate mortgage		209		0.02			0		0.00
Home equity lines		43		0.03			116		0.09
Residential loans		252		0.02			116		0.01
Consumer direct		0		0.00			0		0.00
Consumer indirect		0		0.00			0		0.00
Consumer loans		0		0.00			0		0.00
Loans and lease financing	$	252		0.01	%	$	416		0.01	%

Those loans, segregated by class of loans and concession granted, are presented below for the six months ended June 30, 2023:

	Interest Rate Reduction					Term Extension
(in thousands)	Amortized Cost at June 30, 2023		% of total			Amortized Cost at June 30, 2023		% of total
Hotel/motel	$	0		0.00	%	$	0		0.00	%
Commercial real estate residential		311		0.08			1,383		0.35
Commercial real estate nonresidential		4,573		0.58			4,800		0.61
Dealer floorplans		0		0.00			0		0.00
Commercial other		0		0.00			1,474		0.46
Commercial loans		4,884		0.25			7,657		0.39
Real estate mortgage		58		0.01			3,317		0.38
Home equity lines		0		0.00			54		0.04
Residential loans		58		0.01			3,371		0.33
Consumer direct		0		0.00			224		0.14
Consumer indirect		0		0.00			450		0.06
Consumer loans		0		0.00			674		0.07
Loans and lease financing	$	4,942		0.13	%	$	11,702		0.30	%

	Combination – Term Extension and Interest Rate Reduction					Payment Change
(in thousands)	Amortized Cost at June 30, 2023		% of total			Amortized Cost at June 30, 2023		% of total
Hotel/motel	$	0		0.00	%	$	0		0.00	%
Commercial real estate residential		88		0.02			0		0.00
Commercial real estate nonresidential		0		0.00			0		0.00
Dealer floorplans		0		0.00			0		0.00
Commercial other		0		0.00			300		0.09
Commercial loans		88		0.00			300		0.02
Real estate mortgage		427		0.05			0		0.00
Home equity lines		77		0.06			116		0.09
Residential loans		504		0.05			116		0.01
Consumer direct		0		0.00			20		0.01
Consumer indirect		0		0.00			0		0.00
Consumer loans		0		0.00			20		0.00
Loans and lease financing	$	592		0.02	%	$	436		0.01	%

Financial Effect of Modifications Made to Borrowers Experiencing Financial Difficulty

The following table describes the financial effect of the modifications made to borrowers experiencing financial difficulty for the three months ended June 30, 2023:

Loan Type	Interest Rate Reduction Financial Impact	Term Extension Financial Impact
Hotel/motel
Commercial real estate residential		Added a weighted-average 11.7 years to life of the loans
Commercial real estate nonresidential	Reduced weighted-average contractual interest rate from 10.8% to 8.5%
Dealer floorplans
Commercial other		Added a weighted-average 0.8 years to life of the loans
Real estate mortgage		Added a weighted-average 4 years to life of the loans
Home equity lines
Consumer direct		Added a weighted-average 0.2 years to the life of the loans
Consumer indirect		Added a weighted-average 0.5 years to the life of the loans

Loan Type	Combination – Term Extension and  Interest Rate Reduction Financial Impact	Payment Changes Financial Impact
Hotel/motel
Commercial real estate residential
Commercial real estate nonresidential
Dealer floorplans
Commercial other		Provided payment changes that will be added to the end of the original loan term
Real estate mortgage	Reduced weighted-average contractual interest rate from 6.8% to 6.2% and increased the weighted-average life by 9.7 years
Home equity lines	Reduced weighted-average contractual interest rate from 10.3% to 8.3% and increased the weighted-average life by 14.3 years	Provided payment changes that will be added to the end of the original loan term
Consumer direct
Consumer indirect

The following table describes the financial effect of the modifications made to borrowers experiencing financial difficulty for the six months ended June 30, 2023:

Loan Type	Interest Rate Reduction Financial Impact	Term Extension Financial Impact
Hotel/motel
Commercial real estate residential	Reduced weighted-average contractual interest rate from 9.6% to 8.0%	The weighted-average term was not increased with the changes to this portfolio
Commercial real estate nonresidential	Reduced weighted-average contractual interest rate from 9.5% to 7.5%	The weighted-average term was not increased with the changes to this portfolio
Dealer floorplans
Commercial other		Added a weighted-average 1.4 years to life of the loans
Real estate mortgage	Resulted in no change of the weighted average contractual interest rate of 3.0%	Added a weighted-average 2.8 years to life of the loans
Home equity lines		Added a weighted-average 6.8 years to life of the loans
Consumer direct		Removed a weighted-average 0.6 years from the life of the loans
Consumer indirect		Added a weighted-average 0.3 years to the life of the loans

Loan Type	Combination – Term Extension and Interest Rate Reduction Financial Impact	Payment Changes Financial Impact
Hotel/motel
Commercial real estate residential	Reduced weighted-average contractual interest rate from 10.4% to 7.2% and increased the weighted-average life by 5.9 years
Commercial real estate nonresidential
Dealer floorplans
Commercial other		Provided payment changes that will be added to the end of the original loan term
Real estate mortgage	Reduced weighted-average contractual interest rate from 7.1% to 6.1% and increased the weighted-average life by 11.3 years
Home equity lines	Reduced weighted-average contractual interest rate from 9.1% to 8.0% and increased the weighted-average life by 10.2 years	Provided payment changes that will be added to the end of the original loan term
Consumer direct		Provided payment changes that will be added to the end of the original loan term
Consumer indirect

Troubled Debt Restructuring

Presented  below, segregated by class of loans, are TDRs that occurred during the three and six months ended June 30, 2022 and the year ended December 31, 2022:

	Three Months Ended June 30, 2022
	Pre-Modification Outstanding Balance
(in thousands)	Number of Loans		Term Modification		Combination		Total Modification
Hotel/motel		0	$	0	$	0	$	0
Commercial real estate residential		0		0		0		0
Commercial real estate nonresidential		0		0		0		0
Commercial other		5		5,562		0		5,562
Total commercial loans		5		5,562		0		5,562
Real estate mortgage		1		305		0		305
Total residential loans		1		305		0		305
Total troubled debt restructurings		6	$	5,867	$	0	$	5,867

	Three Months Ended June 30, 2022
	Post-Modification Outstanding Balance
(in thousands)	Number of Loans		Term Modification		Combination		Total Modification
Hotel/motel		0	$	0	$	0	$	0
Commercial real estate residential		0		0		0		0
Commercial real estate nonresidential		0		0		0		0
Commercial other		5		5,562		0		5,562
Total commercial loans		5		5,562		0		5,562
Real estate mortgage		1		305		0		305
Total residential loans		1		305		0		305
Total troubled debt restructurings		6	$	5,867	$	0	$	5,867

	Six Months Ended June 30, 2022
	Pre-Modification Outstanding Balance
(in thousands)	Number of Loans		Term Modification		Combination		Total Modification
Hotel/motel		0	$	0	$	0	$	0
Commercial real estate residential		2		154		0		154
Commercial real estate nonresidential		2		245		0		245
Commercial other		9		6,526		0		6,526
Total commercial loans		13		6,925		0		6,925
Real estate mortgage		3		305		916		1,221
Total residential loans		3		305		916		1,221
Total troubled debt restructurings		16	$	7,230	$	916	$	8,146

	Six Months Ended June 30, 2022
	Post-Modification Outstanding Balance
(in thousands)	Number of Loans		Term Modification		Combination		Total Modification
Hotel/motel		0	$	0	$	0	$	0
Commercial real estate residential		2		154		0		154
Commercial real estate nonresidential		2		244		0		244
Commercial other		9		6,525		0		6,525
Total commercial loans		13		6,923		0		6,923
Real estate mortgage		3		305		916		1,221
Total residential loans		3		305		916		1,221
Total troubled debt restructurings		16	$	7,228	$	916	$	8,144

	Year Ended December 31, 2022
	Pre-Modification Outstanding Balance
(in thousands)	Number of Loans		Term Modification		Combination		Other		Total Modification
Commercial real estate residential		6	$	659	$	0	$	66	$	725
Commercial real estate nonresidential		8		1,206		0		118		1,324
Hotel/motel		0		0		0		0		0
Commercial other		22		12,812		0		66		12,878
Total commercial loans		36		14,677		0		250		14,927
Real estate mortgage		5		593		1,309		0		1,902
Total residential loans		5		593		1,309		0		1,902
Total troubled debt restructurings		41	$	15,270	$	1,309	$	250	$	16,829

	Year Ended December 31, 2022
	Post-Modification Outstanding Balance
(in thousands)	Number of Loans		Term Modification		Combination		Other		Total Modification
Commercial real estate residential		6	$	659	$	0	$	66	$	725
Commercial real estate nonresidential		8		1,342		0		118		1,460
Hotel/motel		0		0		0		0		0
Commercial other		22		12,811		0		66		12,877
Total commercial loans		36		14,812		0		250		15,062
Real estate mortgage		5		593		1,309		0		1,902
Total residential loans		5		593		1,309		0		1,902
Total troubled debt restructurings		41	$	15,405	$	1,309	$	250	$	16,964

Payment Status of Modified Loans to Borrowers Experiencing Financial Difficulty

The table below represents the payment status of modified loans to borrowers experiencing financial difficulty.

	Past Due Status (Amortized Cost Basis)
	Current			30-89 Days		90+ Days	Nonaccrual
Hotel/motel	$	0	$	0	$	0	$	0
Commercial real estate residential		1,741		40		0		0
Commercial real estate nonresidential		9,373		0		0		0
Dealer floorplans		0		0		0		0
Commercial other		1,145		292		0		337
Real estate mortgage		3,374		125		118		185
Home equity lines		168		59		0		22
Consumer direct		239		5		0		0
Consumer indirect		371		78		0		0
Total	$	16,411	$	599	$	118	$	544

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Other Real Estate Owned (Tables)

6 Months Ended

Jun. 30, 2023

Other Real Estate Owned [Abstract]

Activity for 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)	2023			2022			2023			2022
Beginning balance of other real estate owned	$	2,776		$	2,299		$	3,671		$	3,486
New assets acquired		124			307			175			444
Capitalized costs		40			73			40			73
Fair value adjustments		(25	)		(23	)		(106	)		(269	)
Sale of assets		(868	)		(702	)		(1,733	)		(1,780	)
Ending balance of other real estate owned	$	2,047		$	1,954		$	2,047		$	1,954

Major Classifications of Foreclosed Properties

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

(in thousands)	June 30 2023		December 31 2022
1-4 family	$	574	$	859
Construction/land development/other		683		867
Non-farm/non-residential		790		1,945
Total foreclosed properties	$	2,047	$	3,671

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Repurchase Agreements (Tables)

6 Months Ended

Jun. 30, 2023

Repurchase Agreements [Abstract]

Remaining Contractual Maturity of Securities Sold Under Agreements to Repurchase by Class of Collateral Pledged

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, 2023 and December 31, 2022 is presented in the following tables:

	June 30, 2023
	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	$	19,951	$	2,000	$	0	$	22,608	$	44,559
State and political subdivisions		99,257		1,391		0		7,898		108,546
U.S. government sponsored agency mortgage-backed securities		23,552		7,609		0		43,633		74,794
Asset-backed securities		1,121		0		0		0		1,121
Total	$	143,881	$	11,000	$	0	$	74,139	$	229,020

	December 31, 2022
	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	$	21,679	$	34	$	2,979	$	1,832	$	26,524
State and political subdivisions		96,627		466		9,634		2,140		108,867
U.S. government sponsored agency mortgage-backed securities		17,964		0		52,387		9,385		79,736
Asset-backed securities		304		0		0		0		304
Total	$	136,574	$	500	$	65,000	$	13,357	$	215,431

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Fair Value of Financial Assets and Liabilities (Tables)

6 Months Ended

Jun. 30, 2023

Fair Value of Financial Assets and Liabilities [Abstract]

Fair Value Measurements of 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 June 30, 2023 and December 31, 2022 and indicate the level within the fair value hierarchy of the valuation techniques.

			Fair Value Measurements at June 30, 2023 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	$	365,394	$	341,199	$	24,195	$	0
State and political subdivisions		259,825		0		259,825		0
U.S. government sponsored agency mortgage-backed securities		487,899		0		487,899		0
Asset-backed securities		88,135		0		88,135		0
Equity securities at fair value		2,545		0		0		2,545
Mortgage servicing rights		8,230		0		0		8,230

			Fair Value Measurements at December 31, 2022 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	$	381,932	$	346,265	$	35,667	$	0
State and political subdivisions		265,102		0		265,102		0
U.S. government sponsored agency mortgage-backed securities		520,085		0		520,085		0
Asset-backed securities		89,107		0		89,107		0
Equity securities at fair value		2,166		0		0		2,166
Mortgage servicing rights		8,468		0		0		8,468

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:

	Three Months Ended June 30, 2023					Three Months Ended June 30, 2022
(in thousands)	Equity Securities at Fair Value		Mortgage Servicing Rights			Equity Securities at Fair Value			Mortgage Servicing Rights
Beginning balance	$	2,380	$	8,121		$	2,352		$	7,748
Total unrealized gains (losses)
Included in net income		165		80			(224	)		468
Issues		0		46			0			223
Settlements		0		(17	)		0			(219	)
Ending balance	$	2,545	$	8,230		$	2,128		$	8,220
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	$	165	$	80		$	(224	)	$	468

	Six Months Ended June 30, 2023					Six Months Ended June 30, 2022
(in thousands)	Equity Securities at Fair Value		Mortgage Servicing Rights			Equity Securities at Fair Value			Mortgage Servicing Rights
Beginning balance	$	2,166	$	8,468		$	2,253		$	6,774
Total unrealized gains (losses)
Included in net income		379		(134	)		(125	)		1,451
Issues		0		96			0			452
Settlements		0		(200	)		0			(457	)
Ending balance	$	2,545	$	8,230		$	2,128		$	8,220
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	$	379	$	(134	)	$	(125	)	$	1,451

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				Six Months Ended
	June 30				June 30
(in thousands)	2023		2022		2023		2022
Total gains	$	227	$	25	$	44	$	869

Fair Value Measurements of 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 June 30, 2023 and December 31, 2022 and indicate the level within the fair value hierarchy of the valuation techniques.

			Fair Value Measurements at June 30, 2023 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
Other real estate owned	$	177	$	0	$	0	$	177

			Fair Value Measurements at December 31, 2022 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	$	2,703	$	0	$	0	$	2,703
Other real estate owned		570		0		0		570

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 June 30, 2023 and December 31, 2022.

	Quantitative Information about Level 3 Fair Value Measurements
(in thousands)	Fair Value at June 30, 2023		Valuation Technique(s)	Unobservable Input	Range (Weighted Average)
Equity securities at fair value	$	2,545	Discount cash flows, computer pricing model	Discount rate	8.0% - 12.0% (10.0%)
				Conversion date	Dec 2025 - Dec 2029 (Dec 2027)
Mortgage servicing rights	$	8,230	Discount cash flows, computer pricing model	Constant prepayment rate	0.0% - 26.7% (7.4%)
				Probability of default	0.0% - 100% (1.3%)
				Discount rate	9.5% - 11.5% (10.0%)
Other real estate owned	$	177	Market comparable properties	Comparability adjustments	0.0% - 10.0% (10.0%)

	Quantitative Information about Level 3 Fair Value Measurements
(in thousands)	Fair Value at December 31, 2022		Valuation Technique(s)	Unobservable Input	Range (Weighted Average)
Equity securities at fair value	$	2,166	Discount cash flows, computer pricing model	Discount rate	8.0% - 12.0% (10.0%)
				Conversion date	Dec 2025 - Dec 2029 (Dec 2027)
Mortgage servicing rights	$	8,468	Discount cash flows, computer pricing model	Constant prepayment rate	6.5% - 28.0% (7.1%)
				Probability of default	0.0% - 100.0% (1.2%)
				Discount rate	9.5% - 12.0% (10.0%)
Collateral-dependent loans	$	2,703	Market comparable properties	Marketability discount	52.0% - 52.0% (52.0%)
Other real estate owned	$	570	Market comparable properties	Comparability adjustments	10.0% - 30.6% (10.9%)

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

The following table presents estimated fair value of CTBI’s financial instruments as of June 30, 2023 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 June 30, 2023 were measured using an exit price notion.

			Fair Value Measurements at June 30, 2023 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	$	109,545	$	109,545	$	0	$	0
Certificates of deposit in other banks		245		0		245		0
Debt securities available-for-sale		1,201,253		341,199		860,054		0
Equity securities at fair value		2,545		0		0		2,545
Loans held for sale		238		244		0		0
Loans, net		3,881,677		0		0		3,717,729
Federal Home Loan Bank stock		6,545		0		6,545		0
Federal Reserve Bank stock		4,887		0		4,887		0
Accrued interest receivable		20,257		0		20,257		0
Financial liabilities:
Deposits	$	4,516,660	$	1,361,078	$	3,163,628	$	0
Repurchase agreements		229,020		0		0		229,277
Federal funds purchased		500		0		500		0
Advances from Federal Home Loan Bank		345		0		242		0
Long-term debt		64,350		0		0		52,043
Accrued interest payable		5,624		0		5,624		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, 2022 and indicates the level within the fair value hierarchy of the valuation techniques.

			Fair Value Measurements at December 31, 2022 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	$	128,686	$	128,686	$	0	$	0
Certificates of deposit in other banks		245		0		245		0
Debt securities available-for-sale		1,256,226		346,265		909,961		0
Equity securities at fair value		2,166		0		0		2,166
Loans held for sale		109		112		0		0
Loans, net		3,663,309		0		0		3,511,810
Federal Home Loan Bank stock		6,676		0		6,676		0
Federal Reserve Bank stock		4,887		0		4,887		0
Accrued interest receivable		19,592		0		19,592		0
Financial liabilities:
Deposits	$	4,426,143	$	1,394,915	$	3,050,144	$	0
Repurchase agreements		215,431		0		0		215,542
Federal funds purchased		500		0		500		0
Advances from Federal Home Loan Bank		355		0		380		0
Long-term debt		57,841		0		0		55,860
Accrued interest payable		2,237		0		2,237		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

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Earnings Per Share (Tables)

6 Months Ended

Jun. 30, 2023

Earnings Per Share [Abstract]

Computation of Basic and Diluted 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)	2023		2022		2023		2022
Numerator:
Net income	$	19,404	$	20,271	$	38,717	$	39,999
Denominator:
Basic earnings per share:
Weighted average shares		17,884		17,835		17,877		17,827
Diluted earnings per share:
Effect of dilutive stock options and restricted stock grants		6		8		8		11
Adjusted weighted average shares		17,890		17,843		17,885		17,838
Earnings per share:
Basic earnings per share	$	1.09	$	1.14	$	2.17	$	2.24
Diluted earnings per share		1.08		1.14		2.16		2.24

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Accumulated Other Comprehensive Income (Loss) (Tables)

6 Months Ended

Jun. 30, 2023

Accumulated Other Comprehensive Income (Loss) [Abstract]

Amounts Reclassified from Accumulated Other Comprehensive Income (Loss) (AOCI)

Amounts reclassified from accumulated other comprehensive income (loss) (“AOCI”) and the affected line items in the statements of income during the three and six months ended June 30, 2023 and 2022 were:

	Amounts Reclassified from AOCI
(in thousands)	Three Months Ended June 30					Six Months Ended June 30
	2023		2022			2023		2022
Affected line item in the statements of income
Securities gains (losses)	$	0	$	(1	)	$	4	$	(1	)
Tax expense (benefit)		0		0			1		0
Total reclassifications out of AOCI	$	0	$	(1	)	$	3	$	(1	)

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Summary of Significant Accounting Policies (Details) $ in Thousands	6 Months Ended
	Jun. 30, 2023 USD ($) Payment	Dec. 31, 2022 USD ($)
Investments [Abstract]
ACL for AFS debt securities	$ 0	$ 0
Securities held-to-maturity	$ 0	0
Loans [Abstract]
Past due period after which loans must be well secured and in the process of collection to continue accruing interest	90 days
Period of current principal and interest payments for reclassifying nonaccrual loans as accruing loans	6 months
Allowance for Credit Losses [Abstract]
Impact of difference in amortized cost basis versus consideration of loan balances on allowance for credit losses	0.01%
Number of delinquent monthly payments before loan charge off | Payment	5
Current value assessment period for past due loans secured against real estate	90 days
Threshold period past due for initiation of foreclosure proceedings	120 days
Goodwill and Core Deposit Intangible [Abstract]
Goodwill	$ 65,490	$ 65,490
Minimum [Member]
Allowance for Credit Losses [Abstract]
Percentage exposure of capital	5.00%
Commercial [Member]
Allowance for Credit Losses [Abstract]
Threshold period past due for individual evaluations	90 days
Commercial [Member] | 90+ Days Past Due [Member] | Minimum [Member]
Allowance for Credit Losses [Abstract]
Threshold outstanding loan balance for individual evaluations	$ 1,000
Commercial [Member] | Nonaccrual Status [Member] | Minimum [Member]
Allowance for Credit Losses [Abstract]
Threshold outstanding loan balance for individual evaluations	1,000
Threshold amount of outstanding loan balance for specific reserve to be created	1,000
Commercial [Member] | Borrower Experiencing Financial Difficulty [Member] | Minimum [Member]
Allowance for Credit Losses [Abstract]
Threshold outstanding loan balance for individual evaluations	1,000
Threshold amount of outstanding loan balance for specific reserve to be created	1,000
Commercial [Member] | Criticized [Member] | Minimum [Member]
Allowance for Credit Losses [Abstract]
Threshold outstanding loan balance for individual evaluations	1,000
Threshold amount of outstanding loan balance for specific reserve to be created	$ 1,000
Commercial [Member] | Unsecured Commercial Loan [Member]
Allowance for Credit Losses [Abstract]
Charge off threshold for loans considered uncollectible	90 days
Consumer [Member] | Closed-End Consumer Loan [Member]
Allowance for Credit Losses [Abstract]
Charge off threshold for loans considered uncollectible	120 days

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Stock-Based Compensation (Details) - USD ($) $ in Thousands	1 Months Ended	3 Months Ended		6 Months Ended
	Apr. 30, 2022	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Stock-based Compensation [Abstract]
Stock based compensation expense				$ 788	$ 742
Restricted Stock [Member]
Stock-based Compensation [Abstract]
Stock based compensation expense		$ 411	$ 258	788	742
Dividend paid on stock based compensation		44	$ 24	88	$ 46
Unrecognized compensation expense related to restricted stock grants		$ 3,700		$ 3,700
Unrecognized compensation expense, weighted average period				3 years 4 months 24 days
Granted (in shares)		0	5,000	52,865	40,438
Forfeited (in shares)		0	0	790	0
Stock Options [Member]
Stock-based Compensation [Abstract]
Stock based compensation expense		$ 0	$ 0	$ 0	$ 0
Unrecognized compensation expense related to unvested stock option awards		$ 0		$ 0
Options granted to purchase shares of CTBI common stock (in shares)				0	0
2015 Plan [Member] | Restricted Stock [Member]
Stock-based Compensation [Abstract]
Award vesting period				4 years
2015 Plan [Member] | Restricted Stock [Member] | Maximum [Member]
Stock-based Compensation [Abstract]
Period of certain participant employee termination events following change in control for restriction on restricted stock granted to lapse				24 months
2015 Plan [Member] | Management Retention Restricted Stock [Member]
Stock-based Compensation [Abstract]
Granted (in shares)	5,000
Award vesting period				5 years

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Securities, Held-to-maturity Securities (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Held-to-maturity [Abstract]
Securities held-to-maturity	$ 0	$ 0

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Securities, Available-for-sale Securities (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Available-for-sale [Abstract]
Amortized cost	$ 1,362,748	$ 1,430,605
Gross unrealized gains	146	245
Gross unrealized losses	(161,641)	(174,624)
Fair value	1,201,253	1,256,226
U.S. Treasury and Government Agencies [Member]
Available-for-sale [Abstract]
Amortized cost	400,148	418,579
Gross unrealized gains	143	212
Gross unrealized losses	(34,897)	(36,859)
Fair value	365,394	381,932
State and Political Subdivisions [Member]
Available-for-sale [Abstract]
Amortized cost	314,048	326,746
Gross unrealized gains	2	32
Gross unrealized losses	(54,225)	(61,676)
Fair value	259,825	265,102
U.S. Government Sponsored Agency Mortgage-backed Securities [Member]
Available-for-sale [Abstract]
Amortized cost	558,964	593,917
Gross unrealized gains	1	1
Gross unrealized losses	(71,066)	(73,833)
Fair value	487,899	520,085
Asset-backed Securities [Member]
Available-for-sale [Abstract]
Amortized cost	89,588	91,363
Gross unrealized gains	0	0
Gross unrealized losses	(1,453)	(2,256)
Fair value	$ 88,135	$ 89,107

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Securities, Amortized Cost and Fair Value of Securities by Contractual Maturity (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Available-for-sale, amortized cost [Abstract]
Due in one year or less	$ 33,089
Due after one through five years	336,248
Due after five through ten years	169,173
Due after ten years	175,686
Amortized cost	1,362,748	$ 1,430,605
Available for sale, fair value [Abstract]
Due in one year or less	32,613
Due after one through five years	305,693
Due after five through ten years	145,760
Due after ten years	141,153
Fair value	1,201,253	1,256,226
U.S. Government Sponsored Agency Mortgage-backed Securities [Member]
Available-for-sale, amortized cost [Abstract]
Without single maturity date	558,964
Amortized cost	558,964	593,917
Available for sale, fair value [Abstract]
Without single maturity date	487,899
Fair value	487,899	520,085
Asset-backed Securities [Member]
Available-for-sale, amortized cost [Abstract]
Without single maturity date	89,588
Amortized cost	89,588	91,363
Available for sale, fair value [Abstract]
Without single maturity date	88,135
Fair value	$ 88,135	$ 89,107

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Securities, Gains (Loss) on Securities, Securities Pledged, and Securities Sold Under Agreements to Repurchase (Details) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023 USD ($)	Jun. 30, 2022 USD ($)	Jun. 30, 2023 USD ($) shares	Jun. 30, 2022 USD ($) shares	Dec. 31, 2022 USD ($)
Gains (Loss) on Sales of Securities [Abstract]
Net securities gain (loss)	$ 165	$ (225)	$ 383	$ (126)
Realized pre-tax gain (loss) on sales and calls of AFS securities		(1)	4	(1)
Unrealized (loss) gain from fair value adjustment of equity securities	165	(224)	379	$ (125)
Equity Securities at Fair Value [Abstract]
Equity securities at fair value	2,545		2,545		$ 2,166
Amortized cost of securities sold under agreements to repurchase	342,900		342,900		316,900
Asset Pledged as Collateral [Member] | Public Deposits and for Other Purposes [Member]
Equity Securities at Fair Value [Abstract]
Securities	744,400		744,400		$ 725,000
Visa Class B Restricted Stock [Member]
Equity Securities at Fair Value [Abstract]
Equity securities at fair value	2,500		$ 2,500
Increase (decrease) in fair value of equity securities	$ 165	$ (224)
Number of equity securities sold (in shares) | shares			0	0

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Securities, Securities in Continuous Unrealized Loss Position (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Securities [Abstract]
Percentage of total investment with unrealized losses	98.70%	97.40%
Available-for-sale, amortized cost [Abstract]
Less than 12 months	$ 93,214	$ 416,778
12 months or more	1,254,300	981,280
Total	1,347,514	1,398,058
Available-for-sale, gross unrealized losses [Abstract]
Less than 12 months	(3,309)	(21,324)
12 months or more	(158,332)	(153,300)
Total	(161,641)	(174,624)
Available-for-sale, fair value [Abstract]
Less than 12 months	89,905	395,454
12 months or more	1,095,968	827,980
Total	1,185,873	1,223,434
U.S. Treasury and Government Agencies [Member]
Available-for-sale, amortized cost [Abstract]
Less than 12 months	7,188	144,305
12 months or more	380,143	249,424
Total	387,331	393,729
Available-for-sale, gross unrealized losses [Abstract]
Less than 12 months	(10)	(6,953)
12 months or more	(34,887)	(29,906)
Total	(34,897)	(36,859)
Available-for-sale, fair value [Abstract]
Less than 12 months	7,178	137,352
12 months or more	345,256	219,518
Total	352,434	356,870
State and Political Subdivisions [Member]
Available-for-sale, amortized cost [Abstract]
Less than 12 months	34,386	94,277
12 months or more	277,291	225,019
Total	311,677	319,296
Available-for-sale, gross unrealized losses [Abstract]
Less than 12 months	(1,493)	(6,257)
12 months or more	(52,732)	(55,419)
Total	(54,225)	(61,676)
Available-for-sale, fair value [Abstract]
Less than 12 months	32,893	88,020
12 months or more	224,559	169,600
Total	257,452	257,620
U.S. Government Sponsored Agency Mortgage-backed Securities [Member]
Available-for-sale, amortized cost [Abstract]
Less than 12 months	51,640	139,314
12 months or more	507,278	454,357
Total	558,918	593,671
Available-for-sale, gross unrealized losses [Abstract]
Less than 12 months	(1,806)	(6,883)
12 months or more	(69,260)	(66,950)
Total	(71,066)	(73,833)
Available-for-sale, fair value [Abstract]
Less than 12 months	49,834	132,431
12 months or more	438,018	387,407
Total	487,852	519,838
Asset-backed Securities [Member]
Available-for-sale, amortized cost [Abstract]
Less than 12 months	0	38,882
12 months or more	89,588	52,480
Total	89,588	91,362
Available-for-sale, gross unrealized losses [Abstract]
Less than 12 months	0	(1,231)
12 months or more	(1,453)	(1,025)
Total	(1,453)	(2,256)
Available-for-sale, fair value [Abstract]
Less than 12 months	0	37,651
12 months or more	88,135	51,455
Total	$ 88,135	$ 89,106

XML

Loans, Major Classifications of Loans, Net of Income and Deferred Loan Origination Cost (Details) $ in Thousands	6 Months Ended
	Jun. 30, 2023 USD ($) Segment	Dec. 31, 2022 USD ($)
Major Classification of Loans Net of Unearned Income, Deferred Loan Origination Costs and Net Premiums on Acquired Loans [Abstract]
Loans and lease financing	$ 3,929,695	$ 3,709,290
Unearned fees	$ 1,000	1,000
Number of portfolio segments | Segment	9
Loans held for sale [Abstract]
Loans held for sale	$ 238	109
Commercial [Member]
Major Classification of Loans Net of Unearned Income, Deferred Loan Origination Costs and Net Premiums on Acquired Loans [Abstract]
Loans and lease financing	1,950,629	1,868,858
Commercial [Member] | Hotel/Motel [Member]
Major Classification of Loans Net of Unearned Income, Deferred Loan Origination Costs and Net Premiums on Acquired Loans [Abstract]
Loans and lease financing	$ 372,981	343,640
Percentage of total loan	9.50%
Commercial [Member] | Commercial Real Estate Residential [Member]
Major Classification of Loans Net of Unearned Income, Deferred Loan Origination Costs and Net Premiums on Acquired Loans [Abstract]
Loans and lease financing	$ 393,309	372,914
Commercial [Member] | Commercial Real Estate Nonresidential [Member]
Major Classification of Loans Net of Unearned Income, Deferred Loan Origination Costs and Net Premiums on Acquired Loans [Abstract]
Loans and lease financing	787,598	762,349
Commercial [Member] | Dealer Floorplans [Member]
Major Classification of Loans Net of Unearned Income, Deferred Loan Origination Costs and Net Premiums on Acquired Loans [Abstract]
Loans and lease financing	76,903	77,533
Commercial [Member] | Commercial Other [Member]
Major Classification of Loans Net of Unearned Income, Deferred Loan Origination Costs and Net Premiums on Acquired Loans [Abstract]
Loans and lease financing	319,838	312,422
Residential [Member]
Major Classification of Loans Net of Unearned Income, Deferred Loan Origination Costs and Net Premiums on Acquired Loans [Abstract]
Loans and lease financing	1,015,137	945,536
Residential [Member] | Real Estate Mortgage [Member]
Major Classification of Loans Net of Unearned Income, Deferred Loan Origination Costs and Net Premiums on Acquired Loans [Abstract]
Loans and lease financing	883,104	824,996
Residential [Member] | Home Equity Lines [Member]
Major Classification of Loans Net of Unearned Income, Deferred Loan Origination Costs and Net Premiums on Acquired Loans [Abstract]
Loans and lease financing	132,033	120,540
Consumer [Member]
Major Classification of Loans Net of Unearned Income, Deferred Loan Origination Costs and Net Premiums on Acquired Loans [Abstract]
Loans and lease financing	963,929	894,896
Consumer [Member] | Consumer Direct [Member]
Major Classification of Loans Net of Unearned Income, Deferred Loan Origination Costs and Net Premiums on Acquired Loans [Abstract]
Loans and lease financing	157,848	157,504
Consumer [Member] | Consumer Indirect [Member]
Major Classification of Loans Net of Unearned Income, Deferred Loan Origination Costs and Net Premiums on Acquired Loans [Abstract]
Loans and lease financing	806,081	737,392
Unamortized premiums	$ 30,900	$ 28,500

XML

Loans, Reserve Estimates in ACL (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Mar. 31, 2023	Dec. 31, 2022	Jun. 30, 2022	Mar. 31, 2022	Dec. 31, 2021
Loans and Lease Financing Allowance for Credit Loss [Abstract]
ACL Software	$ 48,018	$ 46,683	$ 45,981	$ 42,344	$ 42,309	$ 41,756
CTBI Internal ACL Model	47,907
Change in Allocation	111
Commercial [Member]
Loans and Lease Financing Allowance for Credit Loss [Abstract]
ACL Software	24,071
CTBI Internal ACL Model	25,767
Change in Allocation	(1,696)
Commercial [Member] | Hotel/Motel [Member]
Loans and Lease Financing Allowance for Credit Loss [Abstract]
ACL Software	5,192	5,287	5,171	4,844	4,711	5,080
CTBI Internal ACL Model	6,038
Change in Allocation	(846)
Commercial [Member] | Commercial Real Estate Residential [Member]
Loans and Lease Financing Allowance for Credit Loss [Abstract]
ACL Software	3,749	5,157	4,894	4,200	4,070	3,986
CTBI Internal ACL Model	4,669
Change in Allocation	(920)
Commercial [Member] | Commercial Real Estate Nonresidential [Member]
Loans and Lease Financing Allowance for Credit Loss [Abstract]
ACL Software	7,797	9,010	9,419	8,968	9,169	8,884
CTBI Internal ACL Model	8,794
Change in Allocation	(997)
Commercial [Member] | Dealer Floorplans [Member]
Loans and Lease Financing Allowance for Credit Loss [Abstract]
ACL Software	1,157	1,694	1,776	1,477	1,519	1,436
CTBI Internal ACL Model	1,719
Change in Allocation	(562)
Commercial [Member] | Commercial Other [Member]
Loans and Lease Financing Allowance for Credit Loss [Abstract]
ACL Software	6,176	4,782	5,285	4,473	4,844	4,422
CTBI Internal ACL Model	4,547
Change in Allocation	1,629
Residential [Member]
Loans and Lease Financing Allowance for Credit Loss [Abstract]
ACL Software	8,992
CTBI Internal ACL Model	9,508
Change in Allocation	(516)
Residential [Member] | Real Estate Mortgage [Member]
Loans and Lease Financing Allowance for Credit Loss [Abstract]
ACL Software	7,884	7,917	7,932	8,179	7,662	7,637
CTBI Internal ACL Model	8,443
Change in Allocation	(559)
Residential [Member] | Home Equity Lines [Member]
Loans and Lease Financing Allowance for Credit Loss [Abstract]
ACL Software	1,108	1,044	1,106	887	819	866
CTBI Internal ACL Model	1,065
Change in Allocation	43
Consumer [Member]
Loans and Lease Financing Allowance for Credit Loss [Abstract]
ACL Software	14,955
CTBI Internal ACL Model	12,632
Change in Allocation	2,323
Consumer [Member] | Consumer Direct [Member]
Loans and Lease Financing Allowance for Credit Loss [Abstract]
ACL Software	2,563	1,746	1,694	1,621	1,787	1,951
CTBI Internal ACL Model	1,673
Change in Allocation	890
Consumer [Member] | Consumer Indirect [Member]
Loans and Lease Financing Allowance for Credit Loss [Abstract]
ACL Software	12,392	$ 10,046	$ 8,704	$ 7,695	$ 7,728	$ 7,494
CTBI Internal ACL Model	10,959
Change in Allocation	$ 1,433

XML

Loans, Balance in ACL (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022	Dec. 31, 2022
Balance in ACL [Roll Forward]
Beginning balance	$ 46,683	$ 42,309	$ 45,981	$ 41,756	$ 41,756
Provision charged to expense	2,009	77	3,125	952	4,905
Losses charged off	(1,953)	(828)	(3,718)	(2,148)	(5,346)
Recoveries	1,279	786	2,630	1,784	4,666
Ending balance	48,018	42,344	48,018	42,344	45,981
Commercial [Member]
Balance in ACL [Roll Forward]
Losses charged off			(1,297)
Ending balance	24,071		24,071
Commercial [Member] | Hotel/Motel [Member]
Balance in ACL [Roll Forward]
Beginning balance	5,287	4,711	5,171	5,080	5,080
Provision charged to expense	(95)	133	21	(20)	307
Losses charged off	0	0	0	(216)	(216)
Recoveries	0	0	0	0	0
Ending balance	5,192	4,844	5,192	4,844	5,171
Commercial [Member] | Commercial Real Estate Residential [Member]
Balance in ACL [Roll Forward]
Beginning balance	5,157	4,070	4,894	3,986	3,986
Provision charged to expense	(1,384)	124	(1,198)	234	951
Losses charged off	(28)	0	(28)	(31)	(92)
Recoveries	4	6	81	11	49
Ending balance	3,749	4,200	3,749	4,200	4,894
Commercial [Member] | Commercial Real Estate Nonresidential [Member]
Balance in ACL [Roll Forward]
Beginning balance	9,010	9,169	9,419	8,884	8,884
Provision charged to expense	(1,393)	(223)	(1,946)	(49)	(154)
Losses charged off	(9)	0	(9)	0	(46)
Recoveries	189	22	333	133	735
Ending balance	7,797	8,968	7,797	8,968	9,419
Commercial [Member] | Dealer Floorplans [Member]
Balance in ACL [Roll Forward]
Beginning balance	1,694	1,519	1,776	1,436	1,436
Provision charged to expense	(537)	(42)	(619)	41	340
Losses charged off	0	0	0	0	0
Recoveries	0	0	0	0	0
Ending balance	1,157	1,477	1,157	1,477	1,776
Commercial [Member] | Commercial Other [Member]
Balance in ACL [Roll Forward]
Beginning balance	4,782	4,844	5,285	4,422	4,422
Provision charged to expense	2,387	(285)	1,971	193	947
Losses charged off	(1,073)	(187)	(1,260)	(344)	(1,082)
Recoveries	80	101	180	202	998
Ending balance	6,176	4,473	6,176	4,473	5,285
Residential [Member]
Balance in ACL [Roll Forward]
Losses charged off			(108)
Ending balance	8,992		8,992
Residential [Member] | Real Estate Mortgage [Member]
Balance in ACL [Roll Forward]
Beginning balance	7,917	7,662	7,932	7,637	7,637
Provision charged to expense	10	586	31	683	466
Losses charged off	(55)	(84)	(95)	(177)	(223)
Recoveries	12	15	16	36	52
Ending balance	7,884	8,179	7,884	8,179	7,932
Residential [Member] | Home Equity Lines [Member]
Balance in ACL [Roll Forward]
Beginning balance	1,044	819	1,106	866	866
Provision charged to expense	76	71	12	38	257
Losses charged off	(13)	(5)	(13)	(24)	(37)
Recoveries	1	2	3	7	20
Ending balance	1,108	887	1,108	887	1,106
Consumer [Member]
Balance in ACL [Roll Forward]
Losses charged off			(2,313)
Ending balance	14,955		14,955
Consumer [Member] | Consumer Direct [Member]
Balance in ACL [Roll Forward]
Beginning balance	1,746	1,787	1,694	1,951	1,951
Provision charged to expense	807	(65)	912	(245)	(210)
Losses charged off	(82)	(175)	(238)	(345)	(609)
Recoveries	92	74	195	260	562
Ending balance	2,563	1,621	2,563	1,621	1,694
Consumer [Member] | Consumer Indirect [Member]
Balance in ACL [Roll Forward]
Beginning balance	10,046	7,728	8,704	7,494	7,494
Provision charged to expense	2,138	(222)	3,941	77	2,001
Losses charged off	(693)	(377)	(2,075)	(1,011)	(3,041)
Recoveries	901	566	1,822	1,135	2,250
Ending balance	$ 12,392	$ 7,695	$ 12,392	$ 7,695	$ 8,704

XML

Loans, Analysis of Allowance for Credit Losses (Details) - USD ($) $ in Millions	3 Months Ended	6 Months Ended	12 Months Ended
	Jun. 30, 2023	Jun. 30, 2023	Jun. 30, 2023	Mar. 31, 2023	Jun. 30, 2022
Allowance for Credit Losses [Abstract]
Period of reasonable and supportable forecast		12 months
Increase in provision for credit losses	$ 0.9		$ 1.9
Allowance for credit losses to nonperforming loans	408.90%	408.90%	408.90%	382.30%	305.90%
Credit loss reserve as percentage of total loans outstanding	1.22%	1.22%	1.22%	1.24%	1.19%

XML

Loans, Nonaccrual Loans Segregated by Class of Loans (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2023	Dec. 31, 2022
Nonaccrual loans segregated by class of loans [Abstract]
Nonaccrual loans with no ACL	$ 0	$ 0
Nonaccrual loans with ACL	5,345	6,813
90+ and still accruing	6,399	8,496
Nonperforming loans	$ 11,744	15,309
Past due period after which loans must be well secured and in process of collection to continue accruing interest	90 days
Commercial [Member]
Nonaccrual loans segregated by class of loans [Abstract]
Nonaccrual loans with no ACL	$ 0	0
Nonaccrual loans with ACL	2,057	2,453
90+ and still accruing	1,289	2,574
Nonperforming loans	3,346	5,027
Commercial [Member] | Hotel/Motel [Member]
Nonaccrual loans segregated by class of loans [Abstract]
Nonaccrual loans with no ACL	0	0
Nonaccrual loans with ACL	0	0
90+ and still accruing	0	0
Nonperforming loans	0	0
Commercial [Member] | Commercial Real Estate Residential [Member]
Nonaccrual loans segregated by class of loans [Abstract]
Nonaccrual loans with no ACL	0	0
Nonaccrual loans with ACL	322	355
90+ and still accruing	712	258
Nonperforming loans	1,034	613
Commercial [Member] | Commercial Real Estate Nonresidential [Member]
Nonaccrual loans segregated by class of loans [Abstract]
Nonaccrual loans with no ACL	0	0
Nonaccrual loans with ACL	982	1,116
90+ and still accruing	300	1,947
Nonperforming loans	1,282	3,063
Commercial [Member] | Commercial Other [Member]
Nonaccrual loans segregated by class of loans [Abstract]
Nonaccrual loans with no ACL	0	0
Nonaccrual loans with ACL	753	982
90+ and still accruing	277	369
Nonperforming loans	1,030	1,351
Residential [Member]
Nonaccrual loans segregated by class of loans [Abstract]
Nonaccrual loans with no ACL	0	0
Nonaccrual loans with ACL	3,288	4,360
90+ and still accruing	4,665	5,416
Nonperforming loans	7,953	9,776
Residential [Member] | Real Estate Mortgage [Member]
Nonaccrual loans segregated by class of loans [Abstract]
Nonaccrual loans with no ACL	0	0
Nonaccrual loans with ACL	3,093	4,069
90+ and still accruing	4,206	4,929
Nonperforming loans	7,299	8,998
Residential [Member] | Home Equity Lines [Member]
Nonaccrual loans segregated by class of loans [Abstract]
Nonaccrual loans with no ACL	0	0
Nonaccrual loans with ACL	195	291
90+ and still accruing	459	487
Nonperforming loans	654	778
Consumer [Member]
Nonaccrual loans segregated by class of loans [Abstract]
Nonaccrual loans with no ACL	0	0
Nonaccrual loans with ACL	0	0
90+ and still accruing	445	506
Nonperforming loans	445	506
Consumer [Member] | Consumer Direct [Member]
Nonaccrual loans segregated by class of loans [Abstract]
Nonaccrual loans with no ACL	0	0
Nonaccrual loans with ACL	0	0
90+ and still accruing	6	41
Nonperforming loans	6	41
Consumer [Member] | Consumer Indirect [Member]
Nonaccrual loans segregated by class of loans [Abstract]
Nonaccrual loans with no ACL	0	0
Nonaccrual loans with ACL	0	0
90+ and still accruing	439	465
Nonperforming loans	$ 439	$ 465

XML

Loans, Loan Portfolio Aging Analysis, Segregated by Class (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2023	Dec. 31, 2022
Bank's Loan portfolio aging analysis, segregated by class [Abstract]
Loans and lease financing	$ 3,929,695	$ 3,709,290
Total Past Due [Member]
Bank's Loan portfolio aging analysis, segregated by class [Abstract]
Loans and lease financing	22,623	28,597
30-59 Days Past Due [Member]
Bank's Loan portfolio aging analysis, segregated by class [Abstract]
Loans and lease financing	8,192	10,797
60-89 Days Past Due [Member]
Bank's Loan portfolio aging analysis, segregated by class [Abstract]
Loans and lease financing	4,642	5,806
90+ Days Past Due [Member]
Bank's Loan portfolio aging analysis, segregated by class [Abstract]
Loans and lease financing	9,789	11,994
Current [Member]
Bank's Loan portfolio aging analysis, segregated by class [Abstract]
Loans and lease financing	3,907,072	3,680,693
Commercial [Member]
Bank's Loan portfolio aging analysis, segregated by class [Abstract]
Loans and lease financing	1,950,629	1,868,858
Commercial [Member] | Total Past Due [Member]
Bank's Loan portfolio aging analysis, segregated by class [Abstract]
Loans and lease financing	5,668	9,331
Commercial [Member] | 30-59 Days Past Due [Member]
Bank's Loan portfolio aging analysis, segregated by class [Abstract]
Loans and lease financing	2,315	4,180
Commercial [Member] | 60-89 Days Past Due [Member]
Bank's Loan portfolio aging analysis, segregated by class [Abstract]
Loans and lease financing	719	1,470
Commercial [Member] | 90+ Days Past Due [Member]
Bank's Loan portfolio aging analysis, segregated by class [Abstract]
Loans and lease financing	2,634	3,681
Commercial [Member] | Current [Member]
Bank's Loan portfolio aging analysis, segregated by class [Abstract]
Loans and lease financing	1,944,961	1,859,527
Commercial [Member] | Hotel/Motel [Member]
Bank's Loan portfolio aging analysis, segregated by class [Abstract]
Loans and lease financing	$ 372,981	343,640
Percentage of total loan	9.50%
Commercial [Member] | Hotel/Motel [Member] | Total Past Due [Member]
Bank's Loan portfolio aging analysis, segregated by class [Abstract]
Loans and lease financing	$ 0	0
Commercial [Member] | Hotel/Motel [Member] | 30-59 Days Past Due [Member]
Bank's Loan portfolio aging analysis, segregated by class [Abstract]
Loans and lease financing	0	0
Commercial [Member] | Hotel/Motel [Member] | 60-89 Days Past Due [Member]
Bank's Loan portfolio aging analysis, segregated by class [Abstract]
Loans and lease financing	0	0
Commercial [Member] | Hotel/Motel [Member] | 90+ Days Past Due [Member]
Bank's Loan portfolio aging analysis, segregated by class [Abstract]
Loans and lease financing	0	0
Commercial [Member] | Hotel/Motel [Member] | Current [Member]
Bank's Loan portfolio aging analysis, segregated by class [Abstract]
Loans and lease financing	372,981	343,640
Commercial [Member] | Commercial Real Estate Residential [Member]
Bank's Loan portfolio aging analysis, segregated by class [Abstract]
Loans and lease financing	393,309	372,914
Commercial [Member] | Commercial Real Estate Residential [Member] | Total Past Due [Member]
Bank's Loan portfolio aging analysis, segregated by class [Abstract]
Loans and lease financing	1,431	1,401
Commercial [Member] | Commercial Real Estate Residential [Member] | 30-59 Days Past Due [Member]
Bank's Loan portfolio aging analysis, segregated by class [Abstract]
Loans and lease financing	152	602
Commercial [Member] | Commercial Real Estate Residential [Member] | 60-89 Days Past Due [Member]
Bank's Loan portfolio aging analysis, segregated by class [Abstract]
Loans and lease financing	279	225
Commercial [Member] | Commercial Real Estate Residential [Member] | 90+ Days Past Due [Member]
Bank's Loan portfolio aging analysis, segregated by class [Abstract]
Loans and lease financing	1,000	574
Commercial [Member] | Commercial Real Estate Residential [Member] | Current [Member]
Bank's Loan portfolio aging analysis, segregated by class [Abstract]
Loans and lease financing	391,878	371,513
Commercial [Member] | Commercial Real Estate Nonresidential [Member]
Bank's Loan portfolio aging analysis, segregated by class [Abstract]
Loans and lease financing	787,598	762,349
Commercial [Member] | Commercial Real Estate Nonresidential [Member] | Total Past Due [Member]
Bank's Loan portfolio aging analysis, segregated by class [Abstract]
Loans and lease financing	2,151	5,555
Commercial [Member] | Commercial Real Estate Nonresidential [Member] | 30-59 Days Past Due [Member]
Bank's Loan portfolio aging analysis, segregated by class [Abstract]
Loans and lease financing	1,101	2,549
Commercial [Member] | Commercial Real Estate Nonresidential [Member] | 60-89 Days Past Due [Member]
Bank's Loan portfolio aging analysis, segregated by class [Abstract]
Loans and lease financing	110	395
Commercial [Member] | Commercial Real Estate Nonresidential [Member] | 90+ Days Past Due [Member]
Bank's Loan portfolio aging analysis, segregated by class [Abstract]
Loans and lease financing	940	2,611
Commercial [Member] | Commercial Real Estate Nonresidential [Member] | Current [Member]
Bank's Loan portfolio aging analysis, segregated by class [Abstract]
Loans and lease financing	785,447	756,794
Commercial [Member] | Dealer Floorplans [Member]
Bank's Loan portfolio aging analysis, segregated by class [Abstract]
Loans and lease financing	76,903	77,533
Commercial [Member] | Dealer Floorplans [Member] | Total Past Due [Member]
Bank's Loan portfolio aging analysis, segregated by class [Abstract]
Loans and lease financing	0	0
Commercial [Member] | Dealer Floorplans [Member] | 30-59 Days Past Due [Member]
Bank's Loan portfolio aging analysis, segregated by class [Abstract]
Loans and lease financing	0	0
Commercial [Member] | Dealer Floorplans [Member] | 60-89 Days Past Due [Member]
Bank's Loan portfolio aging analysis, segregated by class [Abstract]
Loans and lease financing	0	0
Commercial [Member] | Dealer Floorplans [Member] | 90+ Days Past Due [Member]
Bank's Loan portfolio aging analysis, segregated by class [Abstract]
Loans and lease financing	0	0
Commercial [Member] | Dealer Floorplans [Member] | Current [Member]
Bank's Loan portfolio aging analysis, segregated by class [Abstract]
Loans and lease financing	76,903	77,533
Commercial [Member] | Commercial Other [Member]
Bank's Loan portfolio aging analysis, segregated by class [Abstract]
Loans and lease financing	319,838	312,422
Commercial [Member] | Commercial Other [Member] | Total Past Due [Member]
Bank's Loan portfolio aging analysis, segregated by class [Abstract]
Loans and lease financing	2,086	2,375
Commercial [Member] | Commercial Other [Member] | 30-59 Days Past Due [Member]
Bank's Loan portfolio aging analysis, segregated by class [Abstract]
Loans and lease financing	1,062	1,029
Commercial [Member] | Commercial Other [Member] | 60-89 Days Past Due [Member]
Bank's Loan portfolio aging analysis, segregated by class [Abstract]
Loans and lease financing	330	850
Commercial [Member] | Commercial Other [Member] | 90+ Days Past Due [Member]
Bank's Loan portfolio aging analysis, segregated by class [Abstract]
Loans and lease financing	694	496
Commercial [Member] | Commercial Other [Member] | Current [Member]
Bank's Loan portfolio aging analysis, segregated by class [Abstract]
Loans and lease financing	317,752	310,047
Residential [Member]
Bank's Loan portfolio aging analysis, segregated by class [Abstract]
Loans and lease financing	1,015,137	945,536
Residential [Member] | Total Past Due [Member]
Bank's Loan portfolio aging analysis, segregated by class [Abstract]
Loans and lease financing	11,846	12,908
Residential [Member] | 30-59 Days Past Due [Member]
Bank's Loan portfolio aging analysis, segregated by class [Abstract]
Loans and lease financing	2,173	1,655
Residential [Member] | 60-89 Days Past Due [Member]
Bank's Loan portfolio aging analysis, segregated by class [Abstract]
Loans and lease financing	2,963	3,446
Residential [Member] | 90+ Days Past Due [Member]
Bank's Loan portfolio aging analysis, segregated by class [Abstract]
Loans and lease financing	6,710	7,807
Residential [Member] | Current [Member]
Bank's Loan portfolio aging analysis, segregated by class [Abstract]
Loans and lease financing	1,003,291	932,628
Residential [Member] | Real Estate Mortgage [Member]
Bank's Loan portfolio aging analysis, segregated by class [Abstract]
Loans and lease financing	883,104	824,996
Residential [Member] | Real Estate Mortgage [Member] | Total Past Due [Member]
Bank's Loan portfolio aging analysis, segregated by class [Abstract]
Loans and lease financing	10,188	11,338
Residential [Member] | Real Estate Mortgage [Member] | 30-59 Days Past Due [Member]
Bank's Loan portfolio aging analysis, segregated by class [Abstract]
Loans and lease financing	1,440	869
Residential [Member] | Real Estate Mortgage [Member] | 60-89 Days Past Due [Member]
Bank's Loan portfolio aging analysis, segregated by class [Abstract]
Loans and lease financing	2,528	3,402
Residential [Member] | Real Estate Mortgage [Member] | 90+ Days Past Due [Member]
Bank's Loan portfolio aging analysis, segregated by class [Abstract]
Loans and lease financing	6,220	7,067
Residential [Member] | Real Estate Mortgage [Member] | Current [Member]
Bank's Loan portfolio aging analysis, segregated by class [Abstract]
Loans and lease financing	872,916	813,658
Residential [Member] | Home Equity Lines [Member]
Bank's Loan portfolio aging analysis, segregated by class [Abstract]
Loans and lease financing	132,033	120,540
Residential [Member] | Home Equity Lines [Member] | Total Past Due [Member]
Bank's Loan portfolio aging analysis, segregated by class [Abstract]
Loans and lease financing	1,658	1,570
Residential [Member] | Home Equity Lines [Member] | 30-59 Days Past Due [Member]
Bank's Loan portfolio aging analysis, segregated by class [Abstract]
Loans and lease financing	733	786
Residential [Member] | Home Equity Lines [Member] | 60-89 Days Past Due [Member]
Bank's Loan portfolio aging analysis, segregated by class [Abstract]
Loans and lease financing	435	44
Residential [Member] | Home Equity Lines [Member] | 90+ Days Past Due [Member]
Bank's Loan portfolio aging analysis, segregated by class [Abstract]
Loans and lease financing	490	740
Residential [Member] | Home Equity Lines [Member] | Current [Member]
Bank's Loan portfolio aging analysis, segregated by class [Abstract]
Loans and lease financing	130,375	118,970
Consumer [Member]
Bank's Loan portfolio aging analysis, segregated by class [Abstract]
Loans and lease financing	963,929	894,896
Consumer [Member] | Total Past Due [Member]
Bank's Loan portfolio aging analysis, segregated by class [Abstract]
Loans and lease financing	5,109	6,358
Consumer [Member] | 30-59 Days Past Due [Member]
Bank's Loan portfolio aging analysis, segregated by class [Abstract]
Loans and lease financing	3,704	4,962
Consumer [Member] | 60-89 Days Past Due [Member]
Bank's Loan portfolio aging analysis, segregated by class [Abstract]
Loans and lease financing	960	890
Consumer [Member] | 90+ Days Past Due [Member]
Bank's Loan portfolio aging analysis, segregated by class [Abstract]
Loans and lease financing	445	506
Consumer [Member] | Current [Member]
Bank's Loan portfolio aging analysis, segregated by class [Abstract]
Loans and lease financing	958,820	888,538
Consumer [Member] | Consumer Direct [Member]
Bank's Loan portfolio aging analysis, segregated by class [Abstract]
Loans and lease financing	157,848	157,504
Consumer [Member] | Consumer Direct [Member] | Total Past Due [Member]
Bank's Loan portfolio aging analysis, segregated by class [Abstract]
Loans and lease financing	658	722
Consumer [Member] | Consumer Direct [Member] | 30-59 Days Past Due [Member]
Bank's Loan portfolio aging analysis, segregated by class [Abstract]
Loans and lease financing	557	555
Consumer [Member] | Consumer Direct [Member] | 60-89 Days Past Due [Member]
Bank's Loan portfolio aging analysis, segregated by class [Abstract]
Loans and lease financing	95	126
Consumer [Member] | Consumer Direct [Member] | 90+ Days Past Due [Member]
Bank's Loan portfolio aging analysis, segregated by class [Abstract]
Loans and lease financing	6	41
Consumer [Member] | Consumer Direct [Member] | Current [Member]
Bank's Loan portfolio aging analysis, segregated by class [Abstract]
Loans and lease financing	157,190	156,782
Consumer [Member] | Consumer Indirect [Member]
Bank's Loan portfolio aging analysis, segregated by class [Abstract]
Loans and lease financing	806,081	737,392
Consumer [Member] | Consumer Indirect [Member] | Total Past Due [Member]
Bank's Loan portfolio aging analysis, segregated by class [Abstract]
Loans and lease financing	4,451	5,636
Consumer [Member] | Consumer Indirect [Member] | 30-59 Days Past Due [Member]
Bank's Loan portfolio aging analysis, segregated by class [Abstract]
Loans and lease financing	3,147	4,407
Consumer [Member] | Consumer Indirect [Member] | 60-89 Days Past Due [Member]
Bank's Loan portfolio aging analysis, segregated by class [Abstract]
Loans and lease financing	865	764
Consumer [Member] | Consumer Indirect [Member] | 90+ Days Past Due [Member]
Bank's Loan portfolio aging analysis, segregated by class [Abstract]
Loans and lease financing	439	465
Consumer [Member] | Consumer Indirect [Member] | Current [Member]
Bank's Loan portfolio aging analysis, segregated by class [Abstract]
Loans and lease financing	$ 801,630	$ 731,756

XML

Loans, Credit Risk Profile Based on Rating Category and Payment Activity and on Performing and Nonperforming Status, Segregated by Class (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022	Dec. 31, 2022
Credit Risk Profile of Loan Portfolio Segregated by Class of Loans and Origination Year [Abstract]
Total	$ 3,929,695		$ 3,929,695		$ 3,709,290
Current Period Gross Charge-Offs [Abstract]
Total	(1,953)	$ (828)	(3,718)	$ (2,148)	(5,346)
Consumer mortgage loans secured by real estate properties for which formal foreclosure proceedings are in process	3,800		3,800		3,300
Commercial [Member]
Credit Risk Profile of Loan Portfolio Segregated by Class of Loans and Origination Year [Abstract]
2023/2022	225,520		225,520		542,228
2022/2021	488,857		488,857		407,322
2021/2020	375,797		375,797		197,470
2020/2019	188,240		188,240		160,246
2019/2018	148,751		148,751		78,649
Prior	316,733		316,733		280,907
Revolving Loans	206,731		206,731		202,036
Total	1,950,629		1,950,629		1,868,858
Current Period Gross Charge-Offs [Abstract]
2023			(321)
2022			(632)
2021			(182)
2020			(26)
2019			(90)
Prior			(46)
Revolving loan			0
Total			(1,297)
Commercial [Member] | Pass [Member]
Credit Risk Profile of Loan Portfolio Segregated by Class of Loans and Origination Year [Abstract]
2023/2022	216,480		216,480		519,154
2022/2021	469,213		469,213		378,826
2021/2020	340,015		340,015		171,938
2020/2019	165,602		165,602		149,565
2019/2018	133,040		133,040		70,102
Prior	279,663		279,663		233,022
Revolving Loans	199,256		199,256		192,516
Total	1,803,269		$ 1,803,269		1,715,123
Commercial [Member] | Pass [Member] | Minimum [Member]
Credit Risk Profile of Loan Portfolio Segregated by Class of Loans and Origination Year [Abstract]
Review period for loans			12 months
Commercial [Member] | Pass [Member] | Maximum [Member]
Credit Risk Profile of Loan Portfolio Segregated by Class of Loans and Origination Year [Abstract]
Review period for loans			18 months
Commercial [Member] | Watch [Member]
Credit Risk Profile of Loan Portfolio Segregated by Class of Loans and Origination Year [Abstract]
2023/2022	4,543		$ 4,543		14,348
2022/2021	13,323		13,323		16,052
2021/2020	17,187		17,187		17,892
2020/2019	16,529		16,529		6,696
2019/2018	12,107		12,107		4,257
Prior	18,719		18,719		31,372
Revolving Loans	6,845		6,845		8,484
Total	89,253		89,253		99,101
Commercial [Member] | OAEM [Member]
Credit Risk Profile of Loan Portfolio Segregated by Class of Loans and Origination Year [Abstract]
2023/2022	2,375		2,375		49
2022/2021	49		49		0
2021/2020	6,971		6,971		0
2020/2019	0		0		39
2019/2018	0		0		0
Prior	2,052		2,052		2,046
Revolving Loans	30		30		59
Total	11,477		11,477		2,193
Commercial [Member] | Substandard [Member]
Credit Risk Profile of Loan Portfolio Segregated by Class of Loans and Origination Year [Abstract]
2023/2022	2,122		2,122		8,211
2022/2021	6,272		6,272		12,315
2021/2020	11,624		11,624		7,640
2020/2019	6,109		6,109		3,837
2019/2018	3,604		3,604		4,290
Prior	16,284		16,284		14,162
Revolving Loans	600		600		977
Total	46,615		46,615		51,432
Commercial [Member] | Doubtful [Member]
Credit Risk Profile of Loan Portfolio Segregated by Class of Loans and Origination Year [Abstract]
2023/2022	0		0		466
2022/2021	0		0		129
2021/2020	0		0		0
2020/2019	0		0		109
2019/2018	0		0		0
Prior	15		15		305
Revolving Loans	0		0		0
Total	15		15		1,009
Commercial [Member] | Hotel/Motel [Member]
Credit Risk Profile of Loan Portfolio Segregated by Class of Loans and Origination Year [Abstract]
2023/2022	41,159		41,159		153,183
2022/2021	157,478		157,478		44,998
2021/2020	44,298		44,298		23,265
2020/2019	22,677		22,677		57,781
2019/2018	50,451		50,451		13,178
Prior	52,875		52,875		50,690
Revolving Loans	4,043		4,043		545
Total	372,981		372,981		343,640
Current Period Gross Charge-Offs [Abstract]
Total	0	0	0	(216)	(216)
Commercial [Member] | Hotel/Motel [Member] | Pass [Member]
Credit Risk Profile of Loan Portfolio Segregated by Class of Loans and Origination Year [Abstract]
2023/2022	38,210		38,210		145,262
2022/2021	150,521		150,521		36,002
2021/2020	28,454		28,454		17,742
2020/2019	17,968		17,968		54,328
2019/2018	47,039		47,039		13,178
Prior	47,091		47,091		35,179
Revolving Loans	4,043		4,043		545
Total	333,326		333,326		302,236
Commercial [Member] | Hotel/Motel [Member] | Watch [Member]
Credit Risk Profile of Loan Portfolio Segregated by Class of Loans and Origination Year [Abstract]
2023/2022	2,949		2,949		7,921
2022/2021	6,957		6,957		8,996
2021/2020	8,873		8,873		5,523
2020/2019	4,709		4,709		3,453
2019/2018	3,412		3,412		0
Prior	3,871		3,871		13,555
Revolving Loans	0		0		0
Total	30,771		30,771		39,448
Commercial [Member] | Hotel/Motel [Member] | OAEM [Member]
Credit Risk Profile of Loan Portfolio Segregated by Class of Loans and Origination Year [Abstract]
2023/2022	0		0		0
2022/2021	0		0		0
2021/2020	6,971		6,971		0
2020/2019	0		0		0
2019/2018	0		0		0
Prior	1,913		1,913		1,956
Revolving Loans	0		0		0
Total	8,884		8,884		1,956
Commercial [Member] | Hotel/Motel [Member] | Substandard [Member]
Credit Risk Profile of Loan Portfolio Segregated by Class of Loans and Origination Year [Abstract]
2023/2022	0		0		0
2022/2021	0		0		0
2021/2020	0		0		0
2020/2019	0		0		0
2019/2018	0		0		0
Prior	0		0		0
Revolving Loans	0		0		0
Total	0		0		0
Commercial [Member] | Hotel/Motel [Member] | Doubtful [Member]
Credit Risk Profile of Loan Portfolio Segregated by Class of Loans and Origination Year [Abstract]
2023/2022	0		0		0
2022/2021	0		0		0
2021/2020	0		0		0
2020/2019	0		0		0
2019/2018	0		0		0
Prior	0		0		0
Revolving Loans	0		0		0
Total	0		0		0
Commercial [Member] | Commercial Real Estate Residential [Member]
Credit Risk Profile of Loan Portfolio Segregated by Class of Loans and Origination Year [Abstract]
2023/2022	56,277		56,277		121,482
2022/2021	106,539		106,539		116,150
2021/2020	109,335		109,335		41,976
2020/2019	38,272		38,272		16,700
2019/2018	13,953		13,953		16,267
Prior	54,657		54,657		45,861
Revolving Loans	14,276		14,276		14,478
Total	393,309		393,309		372,914
Current Period Gross Charge-Offs [Abstract]
2023			0
2022			0
2021			(28)
2020			0
2019			0
Prior			0
Revolving loan			0
Total	(28)	0	(28)	(31)	(92)
Commercial [Member] | Commercial Real Estate Residential [Member] | Pass [Member]
Credit Risk Profile of Loan Portfolio Segregated by Class of Loans and Origination Year [Abstract]
2023/2022	55,238		55,238		119,826
2022/2021	104,912		104,912		110,963
2021/2020	104,205		104,205		38,423
2020/2019	35,701		35,701		15,467
2019/2018	12,921		12,921		10,492
Prior	41,206		41,206		36,307
Revolving Loans	14,132		14,132		14,297
Total	368,315		368,315		345,775
Commercial [Member] | Commercial Real Estate Residential [Member] | Watch [Member]
Credit Risk Profile of Loan Portfolio Segregated by Class of Loans and Origination Year [Abstract]
2023/2022	753		753		1,474
2022/2021	1,010		1,010		898
2021/2020	835		835		1,675
2020/2019	1,948		1,948		848
2019/2018	743		743		2,136
Prior	7,367		7,367		7,015
Revolving Loans	144		144		152
Total	12,800		12,800		14,198
Commercial [Member] | Commercial Real Estate Residential [Member] | OAEM [Member]
Credit Risk Profile of Loan Portfolio Segregated by Class of Loans and Origination Year [Abstract]
2023/2022	0		0		0
2022/2021	0		0		0
2021/2020	0		0		0
2020/2019	0		0		39
2019/2018	0		0		0
Prior	65		65		0
Revolving Loans	0		0		29
Total	65		65		68
Commercial [Member] | Commercial Real Estate Residential [Member] | Substandard [Member]
Credit Risk Profile of Loan Portfolio Segregated by Class of Loans and Origination Year [Abstract]
2023/2022	286		286		182
2022/2021	617		617		4,289
2021/2020	4,295		4,295		1,878
2020/2019	623		623		346
2019/2018	289		289		3,639
Prior	6,019		6,019		2,539
Revolving Loans	0		0		0
Total	12,129		12,129		12,873
Commercial [Member] | Commercial Real Estate Residential [Member] | Doubtful [Member]
Credit Risk Profile of Loan Portfolio Segregated by Class of Loans and Origination Year [Abstract]
2023/2022	0		0		0
2022/2021	0		0		0
2021/2020	0		0		0
2020/2019	0		0		0
2019/2018	0		0		0
Prior	0		0		0
Revolving Loans	0		0		0
Total	0		0		0
Commercial [Member] | Commercial Real Estate Nonresidential [Member]
Credit Risk Profile of Loan Portfolio Segregated by Class of Loans and Origination Year [Abstract]
2023/2022	85,972		85,972		180,509
2022/2021	158,985		158,985		179,613
2021/2020	161,560		161,560		95,899
2020/2019	94,208		94,208		76,161
2019/2018	77,271		77,271		46,569
Prior	183,383		183,383		158,857
Revolving Loans	26,219		26,219		24,741
Total	787,598		787,598		762,349
Current Period Gross Charge-Offs [Abstract]
2023			0
2022			0
2021			0
2020			(9)
2019			0
Prior			0
Revolving loan			0
Total	(9)	0	(9)	0	(46)
Commercial [Member] | Commercial Real Estate Nonresidential [Member] | Pass [Member]
Credit Risk Profile of Loan Portfolio Segregated by Class of Loans and Origination Year [Abstract]
2023/2022	81,927		81,927		175,220
2022/2021	153,561		153,561		171,311
2021/2020	152,539		152,539		80,932
2020/2019	79,949		79,949		70,848
2019/2018	66,557		66,557		44,099
Prior	166,883		166,883		137,575
Revolving Loans	25,508		25,508		23,166
Total	726,924		726,924		703,151
Commercial [Member] | Commercial Real Estate Nonresidential [Member] | Watch [Member]
Credit Risk Profile of Loan Portfolio Segregated by Class of Loans and Origination Year [Abstract]
2023/2022	300		300		3,331
2022/2021	3,966		3,966		5,765
2021/2020	6,499		6,499		10,090
2020/2019	9,716		9,716		2,178
2019/2018	7,618		7,618		1,962
Prior	6,710		6,710		10,022
Revolving Loans	711		711		1,550
Total	35,520		35,520		34,898
Commercial [Member] | Commercial Real Estate Nonresidential [Member] | OAEM [Member]
Credit Risk Profile of Loan Portfolio Segregated by Class of Loans and Origination Year [Abstract]
2023/2022	2,375		2,375		19
2022/2021	19		19		0
2021/2020	0		0		0
2020/2019	0		0		0
2019/2018	0		0		0
Prior	74		74		90
Revolving Loans	0		0		0
Total	2,468		2,468		109
Commercial [Member] | Commercial Real Estate Nonresidential [Member] | Substandard [Member]
Credit Risk Profile of Loan Portfolio Segregated by Class of Loans and Origination Year [Abstract]
2023/2022	1,370		1,370		1,939
2022/2021	1,439		1,439		2,537
2021/2020	2,522		2,522		4,877
2020/2019	4,543		4,543		3,135
2019/2018	3,096		3,096		508
Prior	9,701		9,701		10,865
Revolving Loans	0		0		25
Total	22,671		22,671		23,886
Commercial [Member] | Commercial Real Estate Nonresidential [Member] | Doubtful [Member]
Credit Risk Profile of Loan Portfolio Segregated by Class of Loans and Origination Year [Abstract]
2023/2022	0		0		0
2022/2021	0		0		0
2021/2020	0		0		0
2020/2019	0		0		0
2019/2018	0		0		0
Prior	15		15		305
Revolving Loans	0		0		0
Total	15		15		305
Commercial [Member] | Dealer Floorplans [Member]
Credit Risk Profile of Loan Portfolio Segregated by Class of Loans and Origination Year [Abstract]
2023/2022	0		0		0
2022/2021	0		0		0
2021/2020	0		0		0
2020/2019	0		0		0
2019/2018	0		0		0
Prior	0		0		0
Revolving Loans	76,903		76,903		77,533
Total	76,903		76,903		77,533
Current Period Gross Charge-Offs [Abstract]
Total	0	0	0	0	0
Commercial [Member] | Dealer Floorplans [Member] | Pass [Member]
Credit Risk Profile of Loan Portfolio Segregated by Class of Loans and Origination Year [Abstract]
2023/2022	0		0		0
2022/2021	0		0		0
2021/2020	0		0		0
2020/2019	0		0		0
2019/2018	0		0		0
Prior	0		0		0
Revolving Loans	76,903		76,903		77,153
Total	76,903		76,903		77,153
Commercial [Member] | Dealer Floorplans [Member] | Watch [Member]
Credit Risk Profile of Loan Portfolio Segregated by Class of Loans and Origination Year [Abstract]
2023/2022	0		0		0
2022/2021	0		0		0
2021/2020	0		0		0
2020/2019	0		0		0
2019/2018	0		0		0
Prior	0		0		0
Revolving Loans	0		0		380
Total	0		0		380
Commercial [Member] | Dealer Floorplans [Member] | OAEM [Member]
Credit Risk Profile of Loan Portfolio Segregated by Class of Loans and Origination Year [Abstract]
2023/2022	0		0		0
2022/2021	0		0		0
2021/2020	0		0		0
2020/2019	0		0		0
2019/2018	0		0		0
Prior	0		0		0
Revolving Loans	0		0		0
Total	0		0		0
Commercial [Member] | Dealer Floorplans [Member] | Substandard [Member]
Credit Risk Profile of Loan Portfolio Segregated by Class of Loans and Origination Year [Abstract]
2023/2022	0		0		0
2022/2021	0		0		0
2021/2020	0		0		0
2020/2019	0		0		0
2019/2018	0		0		0
Prior	0		0		0
Revolving Loans	0		0		0
Total	0		0		0
Commercial [Member] | Dealer Floorplans [Member] | Doubtful [Member]
Credit Risk Profile of Loan Portfolio Segregated by Class of Loans and Origination Year [Abstract]
2023/2022	0		0		0
2022/2021	0		0		0
2021/2020	0		0		0
2020/2019	0		0		0
2019/2018	0		0		0
Prior	0		0		0
Revolving Loans	0		0		0
Total	0		0		0
Commercial [Member] | Commercial Other [Member]
Credit Risk Profile of Loan Portfolio Segregated by Class of Loans and Origination Year [Abstract]
2023/2022	42,112		42,112		87,054
2022/2021	65,855		65,855		66,561
2021/2020	60,604		60,604		36,330
2020/2019	33,083		33,083		9,604
2019/2018	7,076		7,076		2,635
Prior	25,818		25,818		25,499
Revolving Loans	85,290		85,290		84,739
Total	319,838		319,838		312,422
Current Period Gross Charge-Offs [Abstract]
2023			(321)
2022			(632)
2021			(154)
2020			(17)
2019			(90)
Prior			(46)
Revolving loan			0
Total			(1,260)
Commercial [Member] | Commercial Other [Member] | Pass [Member]
Credit Risk Profile of Loan Portfolio Segregated by Class of Loans and Origination Year [Abstract]
2023/2022	41,105		41,105		78,846
2022/2021	60,219		60,219		60,550
2021/2020	54,817		54,817		34,841
2020/2019	31,984		31,984		8,922
2019/2018	6,523		6,523		2,333
Prior	24,483		24,483		23,961
Revolving Loans	78,670		78,670		77,355
Total	297,801		297,801		286,808
Commercial [Member] | Commercial Other [Member] | Watch [Member]
Credit Risk Profile of Loan Portfolio Segregated by Class of Loans and Origination Year [Abstract]
2023/2022	541		541		1,622
2022/2021	1,390		1,390		393
2021/2020	980		980		604
2020/2019	156		156		217
2019/2018	334		334		159
Prior	771		771		780
Revolving Loans	5,990		5,990		6,402
Total	10,162		10,162		10,177
Commercial [Member] | Commercial Other [Member] | OAEM [Member]
Credit Risk Profile of Loan Portfolio Segregated by Class of Loans and Origination Year [Abstract]
2023/2022	0		0		30
2022/2021	30		30		0
2021/2020	0		0		0
2020/2019	0		0		0
2019/2018	0		0		0
Prior	0		0		0
Revolving Loans	30		30		30
Total	60		60		60
Commercial [Member] | Commercial Other [Member] | Substandard [Member]
Credit Risk Profile of Loan Portfolio Segregated by Class of Loans and Origination Year [Abstract]
2023/2022	466		466		6,090
2022/2021	4,216		4,216		5,489
2021/2020	4,807		4,807		885
2020/2019	943		943		356
2019/2018	219		219		143
Prior	564		564		758
Revolving Loans	600		600		952
Total	11,815		11,815		14,673
Commercial [Member] | Commercial Other [Member] | Doubtful [Member]
Credit Risk Profile of Loan Portfolio Segregated by Class of Loans and Origination Year [Abstract]
2023/2022	0		0		466
2022/2021	0		0		129
2021/2020	0		0		0
2020/2019	0		0		109
2019/2018	0		0		0
Prior	0		0		0
Revolving Loans	0		0		0
Total	0		0		704
Residential [Member]
Credit Risk Profile of Loan Portfolio Segregated by Class of Loans and Origination Year [Abstract]
2023/2022	96,372		96,372		176,736
2022/2021	175,566		175,566		177,751
2021/2020	169,792		169,792		132,893
2020/2019	125,903		125,903		63,206
2019/2018	60,148		60,148		30,895
Prior	264,773		264,773		254,212
Revolving Loans	122,583		122,583		109,843
Total	1,015,137		1,015,137		945,536
Current Period Gross Charge-Offs [Abstract]
2023			0
2022			0
2021			(47)
2020			0
2019			(1)
Prior			(60)
Revolving loan			0
Total			(108)
Residential [Member] | Performing [Member]
Credit Risk Profile of Loan Portfolio Segregated by Class of Loans and Origination Year [Abstract]
2023/2022	96,372		96,372		176,736
2022/2021	175,566		175,566		177,469
2021/2020	169,481		169,481		132,795
2020/2019	125,782		125,782		62,415
2019/2018	59,375		59,375		30,473
Prior	258,276		258,276		246,305
Revolving Loans	122,332		122,332		109,567
Total	1,007,184		1,007,184		935,760
Residential [Member] | Nonperforming [Member]
Credit Risk Profile of Loan Portfolio Segregated by Class of Loans and Origination Year [Abstract]
2023/2022	0		0		0
2022/2021	0		0		282
2021/2020	311		311		98
2020/2019	121		121		791
2019/2018	773		773		422
Prior	6,497		6,497		7,907
Revolving Loans	251		251		276
Total	7,953		7,953		9,776
Residential [Member] | Real Estate Mortgage [Member]
Credit Risk Profile of Loan Portfolio Segregated by Class of Loans and Origination Year [Abstract]
2023/2022	96,372		96,372		176,736
2022/2021	175,566		175,566		177,751
2021/2020	169,792		169,792		132,893
2020/2019	125,903		125,903		63,206
2019/2018	60,148		60,148		30,895
Prior	255,323		255,323		243,515
Revolving Loans	0		0		0
Total	883,104		883,104		824,996
Current Period Gross Charge-Offs [Abstract]
2023			0
2022			0
2021			(47)
2020			0
2019			(1)
Prior			(47)
Revolving loan			0
Total			(95)
Residential [Member] | Real Estate Mortgage [Member] | Performing [Member]
Credit Risk Profile of Loan Portfolio Segregated by Class of Loans and Origination Year [Abstract]
2023/2022	96,372		96,372		176,736
2022/2021	175,566		175,566		177,469
2021/2020	169,481		169,481		132,795
2020/2019	125,782		125,782		62,415
2019/2018	59,375		59,375		30,473
Prior	249,229		249,229		236,110
Revolving Loans	0		0		0
Total	875,805		875,805		815,998
Residential [Member] | Real Estate Mortgage [Member] | Nonperforming [Member]
Credit Risk Profile of Loan Portfolio Segregated by Class of Loans and Origination Year [Abstract]
2023/2022	0		0		0
2022/2021	0		0		282
2021/2020	311		311		98
2020/2019	121		121		791
2019/2018	773		773		422
Prior	6,094		6,094		7,405
Revolving Loans	0		0		0
Total	7,299		7,299		8,998
Residential [Member] | Home Equity Lines [Member]
Credit Risk Profile of Loan Portfolio Segregated by Class of Loans and Origination Year [Abstract]
2023/2022	0		0		0
2022/2021	0		0		0
2021/2020	0		0		0
2020/2019	0		0		0
2019/2018	0		0		0
Prior	9,450		9,450		10,697
Revolving Loans	122,583		122,583		109,843
Total	132,033		132,033		120,540
Current Period Gross Charge-Offs [Abstract]
Prior			(13)
Revolving loan			0
Total	(13)	(5)	(13)	(24)	(37)
Residential [Member] | Home Equity Lines [Member] | Performing [Member]
Credit Risk Profile of Loan Portfolio Segregated by Class of Loans and Origination Year [Abstract]
2023/2022	0		0		0
2022/2021	0		0		0
2021/2020	0		0		0
2020/2019	0		0		0
2019/2018	0		0		0
Prior	9,047		9,047		10,195
Revolving Loans	122,332		122,332		109,567
Total	131,379		131,379		119,762
Residential [Member] | Home Equity Lines [Member] | Nonperforming [Member]
Credit Risk Profile of Loan Portfolio Segregated by Class of Loans and Origination Year [Abstract]
2023/2022	0		0		0
2022/2021	0		0		0
2021/2020	0		0		0
2020/2019	0		0		0
2019/2018	0		0		0
Prior	403		403		502
Revolving Loans	251		251		276
Total	654		654		778
Consumer [Member]
Credit Risk Profile of Loan Portfolio Segregated by Class of Loans and Origination Year [Abstract]
2023/2022	252,523		252,523		433,408
2022/2021	352,720		352,720		210,789
2021/2020	170,302		170,302		140,289
2020/2019	110,063		110,063		56,944
2019/2018	42,956		42,956		33,014
Prior	35,365		35,365		20,452
Revolving Loans	0		0		0
Total	963,929		963,929		894,896
Current Period Gross Charge-Offs [Abstract]
2023			(42)
2022			(931)
2021			(925)
2020			(247)
2019			(89)
Prior			(79)
Revolving loan			0
Total			(2,313)
Consumer [Member] | Performing [Member]
Credit Risk Profile of Loan Portfolio Segregated by Class of Loans and Origination Year [Abstract]
2023/2022	252,523		252,523		433,318
2022/2021	352,557		352,557		210,527
2021/2020	170,119		170,119		140,188
2020/2019	110,027		110,027		56,914
2019/2018	42,938		42,938		33,013
Prior	35,320		35,320		20,430
Revolving Loans	0		0		0
Total	963,484		963,484		894,390
Consumer [Member] | Nonperforming [Member]
Credit Risk Profile of Loan Portfolio Segregated by Class of Loans and Origination Year [Abstract]
2023/2022	0		0		90
2022/2021	163		163		262
2021/2020	183		183		101
2020/2019	36		36		30
2019/2018	18		18		1
Prior	45		45		22
Revolving Loans	0		0		0
Total	445		445		506
Consumer [Member] | Consumer Direct [Member]
Credit Risk Profile of Loan Portfolio Segregated by Class of Loans and Origination Year [Abstract]
2023/2022	35,168		35,168		62,264
2022/2021	45,899		45,899		42,025
2021/2020	33,307		33,307		23,926
2020/2019	19,215		19,215		11,166
2019/2018	9,082		9,082		6,766
Prior	15,177		15,177		11,357
Revolving Loans	0		0		0
Total	157,848		157,848		157,504
Current Period Gross Charge-Offs [Abstract]
2023			0
2022			(146)
2021			(42)
2020			(30)
2019			(14)
Prior			(6)
Revolving loan			0
Total	(82)	(175)	(238)	(345)	(609)
Consumer [Member] | Consumer Direct [Member] | Performing [Member]
Credit Risk Profile of Loan Portfolio Segregated by Class of Loans and Origination Year [Abstract]
2023/2022	35,168		35,168		62,239
2022/2021	45,893		45,893		42,014
2021/2020	33,307		33,307		23,921
2020/2019	19,215		19,215		11,166
2019/2018	9,082		9,082		6,766
Prior	15,177		15,177		11,357
Revolving Loans	0		0		0
Total	157,842		157,842		157,463
Consumer [Member] | Consumer Direct [Member] | Nonperforming [Member]
Credit Risk Profile of Loan Portfolio Segregated by Class of Loans and Origination Year [Abstract]
2023/2022	0		0		25
2022/2021	6		6		11
2021/2020	0		0		5
2020/2019	0		0		0
2019/2018	0		0		0
Prior	0		0		0
Revolving Loans	0		0		0
Total	6		6		41
Consumer [Member] | Consumer Indirect [Member]
Credit Risk Profile of Loan Portfolio Segregated by Class of Loans and Origination Year [Abstract]
2023/2022	217,355		217,355		371,144
2022/2021	306,821		306,821		168,764
2021/2020	136,995		136,995		116,363
2020/2019	90,848		90,848		45,778
2019/2018	33,874		33,874		26,248
Prior	20,188		20,188		9,095
Revolving Loans	0		0		0
Total	806,081		806,081		737,392
Current Period Gross Charge-Offs [Abstract]
2023			(42)
2022			(785)
2021			(883)
2020			(217)
2019			(75)
Prior			(73)
Revolving loan			0
Total	(693)	$ (377)	(2,075)	$ (1,011)	(3,041)
Consumer [Member] | Consumer Indirect [Member] | Performing [Member]
Credit Risk Profile of Loan Portfolio Segregated by Class of Loans and Origination Year [Abstract]
2023/2022	217,355		217,355		371,079
2022/2021	306,664		306,664		168,513
2021/2020	136,812		136,812		116,267
2020/2019	90,812		90,812		45,748
2019/2018	33,856		33,856		26,247
Prior	20,143		20,143		9,073
Revolving Loans	0		0		0
Total	805,642		805,642		736,927
Consumer [Member] | Consumer Indirect [Member] | Nonperforming [Member]
Credit Risk Profile of Loan Portfolio Segregated by Class of Loans and Origination Year [Abstract]
2023/2022	0		0		65
2022/2021	157		157		251
2021/2020	183		183		96
2020/2019	36		36		30
2019/2018	18		18		1
Prior	45		45		22
Revolving Loans	0		0		0
Total	$ 439		$ 439		$ 465

XML

Loans, Collateral Dependent Loans and Loans With/Without Specific Valuation Allowance (Details) - Commercial [Member] $ in Thousands	6 Months Ended		12 Months Ended
	Jun. 30, 2023 USD ($) Loan	Jun. 30, 2022 USD ($) Loan	Dec. 31, 2022 USD ($) Loan
Collateral Pledged [Member]
Collateral Dependent Loans by Segment [Abstract]
Number of Loans | Loan	13	18	15
Recorded balance	$ 32,756	$ 36,561	$ 32,598
Specific Allowance	$ 0	$ 750	$ 1,200
Hotel/Motel [Member] | Collateral Pledged [Member]
Collateral Dependent Loans by Segment [Abstract]
Number of Loans | Loan	2	1	1
Recorded balance	$ 8,114	$ 1,196	$ 1,168
Specific Allowance	$ 0	$ 0	$ 0
Commercial Real Estate Residential [Member] | Collateral Pledged [Member]
Collateral Dependent Loans by Segment [Abstract]
Number of Loans | Loan	3	4	4
Recorded balance	$ 6,353	$ 6,957	$ 7,786
Specific Allowance	$ 0	$ 0	$ 0
Commercial Real Estate Nonresidential [Member] | Collateral Pledged [Member]
Collateral Dependent Loans by Segment [Abstract]
Number of Loans | Loan	6	10	8
Recorded balance	$ 11,704	$ 18,218	$ 14,718
Specific Allowance	$ 0	$ 200	$ 200
Commercial Other [Member] | Collateral Pledged [Member]
Collateral Dependent Loans by Segment [Abstract]
Number of Loans | Loan	2	3	2
Recorded balance	$ 6,585	$ 10,190	$ 8,926
Specific Allowance	$ 0	$ 550	$ 1,000
Commercial Other [Member] | Accounts Receivable, Equipment, and Inventory [Member]
Collateral Dependent Loans by Segment [Abstract]
Number of financing receivables collateralized | Loan	2

XML

Loans, Modified Loans Segregated by Class of Loans and Concession Granted (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022	Dec. 31, 2022
Modified Loans Segregated by Class of Loans and Concession Granted [Abstract]
Amortized cost		$ 5,867		$ 8,144	$ 16,964
Interest Rate Reduction [Member]
Modified Loans Segregated by Class of Loans and Concession Granted [Abstract]
Amortized cost	$ 73		$ 4,942
% of total	0.00%		0.13%
Term Extension [Member]
Modified Loans Segregated by Class of Loans and Concession Granted [Abstract]
Amortized cost	$ 1,605	5,867	$ 11,702	7,228	15,405
% of total	0.04%		0.30%
Combination - Term Extension and Interest Rate Reduction [Member]
Modified Loans Segregated by Class of Loans and Concession Granted [Abstract]
Amortized cost	$ 252	0	$ 592	916	1,309
% of total	0.01%		0.02%
Payment Change [Member]
Modified Loans Segregated by Class of Loans and Concession Granted [Abstract]
Amortized cost	$ 416		$ 436
% of total	0.01%		0.01%
Commercial [Member] | Interest Rate Reduction [Member]
Modified Loans Segregated by Class of Loans and Concession Granted [Abstract]
Amortized cost	$ 73		$ 4,884
% of total	0.00%		0.25%
Commercial [Member] | Interest Rate Reduction [Member] | Hotel/Motel [Member]
Modified Loans Segregated by Class of Loans and Concession Granted [Abstract]
Amortized cost	$ 0		$ 0
% of total	0.00%		0.00%
Commercial [Member] | Interest Rate Reduction [Member] | Commercial Real Estate Residential [Member]
Modified Loans Segregated by Class of Loans and Concession Granted [Abstract]
Amortized cost	$ 0		$ 311
% of total	0.00%		0.08%
Commercial [Member] | Interest Rate Reduction [Member] | Commercial Real Estate Nonresidential [Member]
Modified Loans Segregated by Class of Loans and Concession Granted [Abstract]
Amortized cost	$ 73		$ 4,573
% of total	0.01%		0.58%
Commercial [Member] | Interest Rate Reduction [Member] | Dealer Floorplans [Member]
Modified Loans Segregated by Class of Loans and Concession Granted [Abstract]
Amortized cost	$ 0		$ 0
% of total	0.00%		0.00%
Commercial [Member] | Interest Rate Reduction [Member] | Commercial Other [Member]
Modified Loans Segregated by Class of Loans and Concession Granted [Abstract]
Amortized cost	$ 0		$ 0
% of total	0.00%		0.00%
Commercial [Member] | Term Extension [Member]
Modified Loans Segregated by Class of Loans and Concession Granted [Abstract]
Amortized cost	$ 579		$ 7,657
% of total	0.03%		0.39%
Commercial [Member] | Term Extension [Member] | Hotel/Motel [Member]
Modified Loans Segregated by Class of Loans and Concession Granted [Abstract]
Amortized cost	$ 0		$ 0
% of total	0.00%		0.00%
Commercial [Member] | Term Extension [Member] | Commercial Real Estate Residential [Member]
Modified Loans Segregated by Class of Loans and Concession Granted [Abstract]
Amortized cost	$ 44		$ 1,383
% of total	0.01%		0.35%
Commercial [Member] | Term Extension [Member] | Commercial Real Estate Nonresidential [Member]
Modified Loans Segregated by Class of Loans and Concession Granted [Abstract]
Amortized cost	$ 13		$ 4,800
% of total	0.00%		0.61%
Commercial [Member] | Term Extension [Member] | Dealer Floorplans [Member]
Modified Loans Segregated by Class of Loans and Concession Granted [Abstract]
Amortized cost	$ 0		$ 0
% of total	0.00%		0.00%
Commercial [Member] | Term Extension [Member] | Commercial Other [Member]
Modified Loans Segregated by Class of Loans and Concession Granted [Abstract]
Amortized cost	$ 522		$ 1,474
% of total	0.16%		0.46%
Commercial [Member] | Combination - Term Extension and Interest Rate Reduction [Member]
Modified Loans Segregated by Class of Loans and Concession Granted [Abstract]
Amortized cost	$ 0		$ 88
% of total	0.00%		0.00%
Commercial [Member] | Combination - Term Extension and Interest Rate Reduction [Member] | Hotel/Motel [Member]
Modified Loans Segregated by Class of Loans and Concession Granted [Abstract]
Amortized cost	$ 0		$ 0
% of total	0.00%		0.00%
Commercial [Member] | Combination - Term Extension and Interest Rate Reduction [Member] | Commercial Real Estate Residential [Member]
Modified Loans Segregated by Class of Loans and Concession Granted [Abstract]
Amortized cost	$ 0		$ 88
% of total	0.00%		0.02%
Commercial [Member] | Combination - Term Extension and Interest Rate Reduction [Member] | Commercial Real Estate Nonresidential [Member]
Modified Loans Segregated by Class of Loans and Concession Granted [Abstract]
Amortized cost	$ 0		$ 0
% of total	0.00%		0.00%
Commercial [Member] | Combination - Term Extension and Interest Rate Reduction [Member] | Dealer Floorplans [Member]
Modified Loans Segregated by Class of Loans and Concession Granted [Abstract]
Amortized cost	$ 0		$ 0
% of total	0.00%		0.00%
Commercial [Member] | Combination - Term Extension and Interest Rate Reduction [Member] | Commercial Other [Member]
Modified Loans Segregated by Class of Loans and Concession Granted [Abstract]
Amortized cost	$ 0		$ 0
% of total	0.00%		0.00%
Commercial [Member] | Payment Change [Member]
Modified Loans Segregated by Class of Loans and Concession Granted [Abstract]
Amortized cost	$ 300		$ 300
% of total	0.02%		0.02%
Commercial [Member] | Payment Change [Member] | Hotel/Motel [Member]
Modified Loans Segregated by Class of Loans and Concession Granted [Abstract]
Amortized cost	$ 0		$ 0
% of total	0.00%		0.00%
Commercial [Member] | Payment Change [Member] | Commercial Real Estate Residential [Member]
Modified Loans Segregated by Class of Loans and Concession Granted [Abstract]
Amortized cost	$ 0		$ 0
% of total	0.00%		0.00%
Commercial [Member] | Payment Change [Member] | Commercial Real Estate Nonresidential [Member]
Modified Loans Segregated by Class of Loans and Concession Granted [Abstract]
Amortized cost	$ 0		$ 0
% of total	0.00%		0.00%
Commercial [Member] | Payment Change [Member] | Dealer Floorplans [Member]
Modified Loans Segregated by Class of Loans and Concession Granted [Abstract]
Amortized cost	$ 0		$ 0
% of total	0.00%		0.00%
Commercial [Member] | Payment Change [Member] | Commercial Other [Member]
Modified Loans Segregated by Class of Loans and Concession Granted [Abstract]
Amortized cost	$ 300		$ 300
% of total	0.09%		0.09%
Residential [Member]
Modified Loans Segregated by Class of Loans and Concession Granted [Abstract]
Amortized cost		305		1,221	1,902
Residential [Member] | Real Estate Mortgage [Member]
Modified Loans Segregated by Class of Loans and Concession Granted [Abstract]
Amortized cost		305		1,221	1,902
Residential [Member] | Interest Rate Reduction [Member]
Modified Loans Segregated by Class of Loans and Concession Granted [Abstract]
Amortized cost	$ 0		$ 58
% of total	0.00%		0.01%
Residential [Member] | Interest Rate Reduction [Member] | Real Estate Mortgage [Member]
Modified Loans Segregated by Class of Loans and Concession Granted [Abstract]
Amortized cost	$ 0		$ 58
% of total	0.00%		0.01%
Residential [Member] | Interest Rate Reduction [Member] | Home Equity Lines [Member]
Modified Loans Segregated by Class of Loans and Concession Granted [Abstract]
Amortized cost	$ 0		$ 0
% of total	0.00%		0.00%
Residential [Member] | Term Extension [Member]
Modified Loans Segregated by Class of Loans and Concession Granted [Abstract]
Amortized cost	$ 877	305	$ 3,371	305	593
% of total	0.09%		0.33%
Residential [Member] | Term Extension [Member] | Real Estate Mortgage [Member]
Modified Loans Segregated by Class of Loans and Concession Granted [Abstract]
Amortized cost	$ 877	305	$ 3,317	305	593
% of total	0.10%		0.38%
Residential [Member] | Term Extension [Member] | Home Equity Lines [Member]
Modified Loans Segregated by Class of Loans and Concession Granted [Abstract]
Amortized cost	$ 0		$ 54
% of total	0.00%		0.04%
Residential [Member] | Combination - Term Extension and Interest Rate Reduction [Member]
Modified Loans Segregated by Class of Loans and Concession Granted [Abstract]
Amortized cost	$ 252	0	$ 504	916	1,309
% of total	0.02%		0.05%
Residential [Member] | Combination - Term Extension and Interest Rate Reduction [Member] | Real Estate Mortgage [Member]
Modified Loans Segregated by Class of Loans and Concession Granted [Abstract]
Amortized cost	$ 209	$ 0	$ 427	$ 916	$ 1,309
% of total	0.02%		0.05%
Residential [Member] | Combination - Term Extension and Interest Rate Reduction [Member] | Home Equity Lines [Member]
Modified Loans Segregated by Class of Loans and Concession Granted [Abstract]
Amortized cost	$ 43		$ 77
% of total	0.03%		0.06%
Residential [Member] | Payment Change [Member]
Modified Loans Segregated by Class of Loans and Concession Granted [Abstract]
Amortized cost	$ 116		$ 116
% of total	0.01%		0.01%
Residential [Member] | Payment Change [Member] | Real Estate Mortgage [Member]
Modified Loans Segregated by Class of Loans and Concession Granted [Abstract]
Amortized cost	$ 0		$ 0
% of total	0.00%		0.00%
Residential [Member] | Payment Change [Member] | Home Equity Lines [Member]
Modified Loans Segregated by Class of Loans and Concession Granted [Abstract]
Amortized cost	$ 116		$ 116
% of total	0.09%		0.09%
Consumer [Member] | Interest Rate Reduction [Member]
Modified Loans Segregated by Class of Loans and Concession Granted [Abstract]
Amortized cost	$ 0		$ 0
% of total	0.00%		0.00%
Consumer [Member] | Interest Rate Reduction [Member] | Consumer Direct [Member]
Modified Loans Segregated by Class of Loans and Concession Granted [Abstract]
Amortized cost	$ 0		$ 0
% of total	0.00%		0.00%
Consumer [Member] | Interest Rate Reduction [Member] | Consumer Indirect [Member]
Modified Loans Segregated by Class of Loans and Concession Granted [Abstract]
Amortized cost	$ 0		$ 0
% of total	0.00%		0.00%
Consumer [Member] | Term Extension [Member]
Modified Loans Segregated by Class of Loans and Concession Granted [Abstract]
Amortized cost	$ 149		$ 674
% of total	0.02%		0.07%
Consumer [Member] | Term Extension [Member] | Consumer Direct [Member]
Modified Loans Segregated by Class of Loans and Concession Granted [Abstract]
Amortized cost	$ 54		$ 224
% of total	0.03%		0.14%
Consumer [Member] | Term Extension [Member] | Consumer Indirect [Member]
Modified Loans Segregated by Class of Loans and Concession Granted [Abstract]
Amortized cost	$ 95		$ 450
% of total	0.01%		0.06%
Consumer [Member] | Combination - Term Extension and Interest Rate Reduction [Member]
Modified Loans Segregated by Class of Loans and Concession Granted [Abstract]
Amortized cost	$ 0		$ 0
% of total	0.00%		0.00%
Consumer [Member] | Combination - Term Extension and Interest Rate Reduction [Member] | Consumer Direct [Member]
Modified Loans Segregated by Class of Loans and Concession Granted [Abstract]
Amortized cost	$ 0		$ 0
% of total	0.00%		0.00%
Consumer [Member] | Combination - Term Extension and Interest Rate Reduction [Member] | Consumer Indirect [Member]
Modified Loans Segregated by Class of Loans and Concession Granted [Abstract]
Amortized cost	$ 0		$ 0
% of total	0.00%		0.00%
Consumer [Member] | Payment Change [Member]
Modified Loans Segregated by Class of Loans and Concession Granted [Abstract]
Amortized cost	$ 0		$ 20
% of total	0.00%		0.00%
Consumer [Member] | Payment Change [Member] | Consumer Direct [Member]
Modified Loans Segregated by Class of Loans and Concession Granted [Abstract]
Amortized cost	$ 0		$ 20
% of total	0.00%		0.01%
Consumer [Member] | Payment Change [Member] | Consumer Indirect [Member]
Modified Loans Segregated by Class of Loans and Concession Granted [Abstract]
Amortized cost	$ 0		$ 0
% of total	0.00%		0.00%

XML

Loans, Financial Effect of Modifications Made to Borrowers Experiencing Financial Difficulty (Details)	3 Months Ended	6 Months Ended
	Jun. 30, 2023	Jun. 30, 2023
Interest Rate Reduction [Member] | Commercial Real Estate Residential [Member]
Financial Effect of Modifications Made to Borrowers Experiencing Financial Difficulty [Abstract]
Weighted-average contractual interest rate, pre-modification		9.60%
Weighted-average contractual interest rate, post-modification		8.00%
Interest Rate Reduction [Member] | Commercial Real Estate Nonresidential [Member]
Financial Effect of Modifications Made to Borrowers Experiencing Financial Difficulty [Abstract]
Weighted-average contractual interest rate, pre-modification	10.80%	9.50%
Weighted-average contractual interest rate, post-modification	8.50%	7.50%
Interest Rate Reduction [Member] | Real Estate Mortgage [Member]
Financial Effect of Modifications Made to Borrowers Experiencing Financial Difficulty [Abstract]
Weighted-average contractual interest rate		3.00%
Term Extension [Member] | Commercial Real Estate Residential [Member]
Financial Effect of Modifications Made to Borrowers Experiencing Financial Difficulty [Abstract]
Weighted-average term increased	11 years 8 months 12 days
Term Extension [Member] | Commercial Other [Member]
Financial Effect of Modifications Made to Borrowers Experiencing Financial Difficulty [Abstract]
Weighted-average term increased	9 months 18 days	1 year 4 months 24 days
Term Extension [Member] | Real Estate Mortgage [Member]
Financial Effect of Modifications Made to Borrowers Experiencing Financial Difficulty [Abstract]
Weighted-average term increased	4 years	2 years 9 months 18 days
Term Extension [Member] | Home Equity Lines [Member]
Financial Effect of Modifications Made to Borrowers Experiencing Financial Difficulty [Abstract]
Weighted-average term increased		6 years 9 months 18 days
Term Extension [Member] | Consumer Direct [Member]
Financial Effect of Modifications Made to Borrowers Experiencing Financial Difficulty [Abstract]
Weighted-average term increased	2 months 12 days	7 months 6 days
Term Extension [Member] | Consumer Indirect [Member]
Financial Effect of Modifications Made to Borrowers Experiencing Financial Difficulty [Abstract]
Weighted-average term increased	6 months	3 months 18 days
Combination - Term Extension and Interest Rate Reduction [Member] | Commercial Real Estate Residential [Member]
Financial Effect of Modifications Made to Borrowers Experiencing Financial Difficulty [Abstract]
Weighted-average contractual interest rate, pre-modification		10.40%
Weighted-average contractual interest rate, post-modification		7.20%
Weighted-average term increased		5 years 10 months 24 days
Combination - Term Extension and Interest Rate Reduction [Member] | Real Estate Mortgage [Member]
Financial Effect of Modifications Made to Borrowers Experiencing Financial Difficulty [Abstract]
Weighted-average contractual interest rate, pre-modification	6.80%	7.10%
Weighted-average contractual interest rate, post-modification	6.20%	6.10%
Weighted-average term increased	9 years 8 months 12 days	11 years 3 months 18 days
Combination - Term Extension and Interest Rate Reduction [Member] | Home Equity Lines [Member]
Financial Effect of Modifications Made to Borrowers Experiencing Financial Difficulty [Abstract]
Weighted-average contractual interest rate, pre-modification	10.30%	9.10%
Weighted-average contractual interest rate, post-modification	8.30%	8.00%
Weighted-average term increased	14 years 3 months 18 days	10 years 2 months 12 days

XML

Loans, Troubled Debt Restructurings Segregated by Class (Details) $ in Thousands	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2023 USD ($) Loan	Jun. 30, 2022 USD ($) Loan	Jun. 30, 2023 USD ($)	Jun. 30, 2022 USD ($) Loan	Dec. 31, 2022 USD ($) Loan
Troubled Debt Restructurings Segregated by Class [Abstract]
Number of Loans | Loan		6		16	41
Pre-Modification Outstanding Recorded Investment		$ 5,867		$ 8,146	$ 16,829
Post-Modification Outstanding Balance		5,867		8,144	16,964
Number of loans to borrowers experiencing financial difficulty with subsequent default | Loan	3
Troubled debt restructured loans	$ 0		$ 0
Minimum [Member]
Troubled Debt Restructurings Segregated by Class [Abstract]
Past due period for loan to be considered in default			90 days
Term Modification [Member]
Troubled Debt Restructurings Segregated by Class [Abstract]
Pre-Modification Outstanding Recorded Investment		5,867		7,230	15,270
Post-Modification Outstanding Balance	1,605	5,867	$ 11,702	7,228	15,405
Combination [Member]
Troubled Debt Restructurings Segregated by Class [Abstract]
Pre-Modification Outstanding Recorded Investment		0		916	1,309
Post-Modification Outstanding Balance	252	$ 0	592	$ 916	1,309
Other [Member]
Troubled Debt Restructurings Segregated by Class [Abstract]
Pre-Modification Outstanding Recorded Investment					250
Post-Modification Outstanding Balance					250
Unfunded Loan Commitment [Member]
Troubled Debt Restructurings Segregated by Class [Abstract]
Off-balance sheet credit exposure	1,100		1,100		$ 700
Commercial [Member]
Troubled Debt Restructurings Segregated by Class [Abstract]
Number of Loans | Loan		5		13	36
Pre-Modification Outstanding Recorded Investment		$ 5,562		$ 6,925	$ 14,927
Post-Modification Outstanding Balance		5,562		6,923	15,062
Commercial [Member] | Term Modification [Member]
Troubled Debt Restructurings Segregated by Class [Abstract]
Pre-Modification Outstanding Recorded Investment		5,562		6,925	14,677
Post-Modification Outstanding Balance		5,562		6,923	14,812
Commercial [Member] | Combination [Member]
Troubled Debt Restructurings Segregated by Class [Abstract]
Pre-Modification Outstanding Recorded Investment		0		0	0
Post-Modification Outstanding Balance		$ 0		$ 0	0
Commercial [Member] | Other [Member]
Troubled Debt Restructurings Segregated by Class [Abstract]
Pre-Modification Outstanding Recorded Investment					250
Post-Modification Outstanding Balance					$ 250
Commercial [Member] | Hotel/Motel [Member]
Troubled Debt Restructurings Segregated by Class [Abstract]
Number of Loans | Loan		0		0	0
Pre-Modification Outstanding Recorded Investment		$ 0		$ 0	$ 0
Post-Modification Outstanding Balance		0		0	0
Commercial [Member] | Hotel/Motel [Member] | Term Modification [Member]
Troubled Debt Restructurings Segregated by Class [Abstract]
Pre-Modification Outstanding Recorded Investment		0		0	0
Post-Modification Outstanding Balance		0		0	0
Commercial [Member] | Hotel/Motel [Member] | Combination [Member]
Troubled Debt Restructurings Segregated by Class [Abstract]
Pre-Modification Outstanding Recorded Investment		0		0	0
Post-Modification Outstanding Balance		$ 0		$ 0	0
Commercial [Member] | Hotel/Motel [Member] | Other [Member]
Troubled Debt Restructurings Segregated by Class [Abstract]
Pre-Modification Outstanding Recorded Investment					0
Post-Modification Outstanding Balance					$ 0
Commercial [Member] | Commercial Real Estate Residential [Member]
Troubled Debt Restructurings Segregated by Class [Abstract]
Number of Loans | Loan		0		2	6
Pre-Modification Outstanding Recorded Investment		$ 0		$ 154	$ 725
Post-Modification Outstanding Balance		0		154	725
Commercial [Member] | Commercial Real Estate Residential [Member] | Term Modification [Member]
Troubled Debt Restructurings Segregated by Class [Abstract]
Pre-Modification Outstanding Recorded Investment		0		154	659
Post-Modification Outstanding Balance		0		154	659
Commercial [Member] | Commercial Real Estate Residential [Member] | Combination [Member]
Troubled Debt Restructurings Segregated by Class [Abstract]
Pre-Modification Outstanding Recorded Investment		0		0	0
Post-Modification Outstanding Balance		$ 0		$ 0	0
Commercial [Member] | Commercial Real Estate Residential [Member] | Other [Member]
Troubled Debt Restructurings Segregated by Class [Abstract]
Pre-Modification Outstanding Recorded Investment					66
Post-Modification Outstanding Balance					$ 66
Commercial [Member] | Commercial Real Estate Nonresidential [Member]
Troubled Debt Restructurings Segregated by Class [Abstract]
Number of Loans | Loan		0		2	8
Pre-Modification Outstanding Recorded Investment		$ 0		$ 245	$ 1,324
Post-Modification Outstanding Balance		0		244	1,460
Commercial [Member] | Commercial Real Estate Nonresidential [Member] | Term Modification [Member]
Troubled Debt Restructurings Segregated by Class [Abstract]
Pre-Modification Outstanding Recorded Investment		0		245	1,206
Post-Modification Outstanding Balance		0		244	1,342
Commercial [Member] | Commercial Real Estate Nonresidential [Member] | Combination [Member]
Troubled Debt Restructurings Segregated by Class [Abstract]
Pre-Modification Outstanding Recorded Investment		0		0	0
Post-Modification Outstanding Balance		$ 0		$ 0	0
Commercial [Member] | Commercial Real Estate Nonresidential [Member] | Other [Member]
Troubled Debt Restructurings Segregated by Class [Abstract]
Pre-Modification Outstanding Recorded Investment					118
Post-Modification Outstanding Balance					$ 118
Commercial [Member] | Commercial Other [Member]
Troubled Debt Restructurings Segregated by Class [Abstract]
Number of Loans | Loan		5		9	22
Pre-Modification Outstanding Recorded Investment		$ 5,562		$ 6,526	$ 12,878
Post-Modification Outstanding Balance		5,562		6,525	12,877
Commercial [Member] | Commercial Other [Member] | Term Modification [Member]
Troubled Debt Restructurings Segregated by Class [Abstract]
Pre-Modification Outstanding Recorded Investment		5,562		6,526	12,812
Post-Modification Outstanding Balance		5,562		6,525	12,811
Commercial [Member] | Commercial Other [Member] | Combination [Member]
Troubled Debt Restructurings Segregated by Class [Abstract]
Pre-Modification Outstanding Recorded Investment		0		0	0
Post-Modification Outstanding Balance		$ 0		$ 0	0
Commercial [Member] | Commercial Other [Member] | Other [Member]
Troubled Debt Restructurings Segregated by Class [Abstract]
Pre-Modification Outstanding Recorded Investment					66
Post-Modification Outstanding Balance					$ 66
Residential [Member]
Troubled Debt Restructurings Segregated by Class [Abstract]
Number of Loans | Loan		1		3	5
Pre-Modification Outstanding Recorded Investment		$ 305		$ 1,221	$ 1,902
Post-Modification Outstanding Balance		305		1,221	1,902
Residential [Member] | Term Modification [Member]
Troubled Debt Restructurings Segregated by Class [Abstract]
Pre-Modification Outstanding Recorded Investment		305		305	593
Post-Modification Outstanding Balance	877	305	3,371	305	593
Residential [Member] | Combination [Member]
Troubled Debt Restructurings Segregated by Class [Abstract]
Pre-Modification Outstanding Recorded Investment		0		916	1,309
Post-Modification Outstanding Balance	252	$ 0	504	$ 916	1,309
Residential [Member] | Other [Member]
Troubled Debt Restructurings Segregated by Class [Abstract]
Pre-Modification Outstanding Recorded Investment					0
Post-Modification Outstanding Balance					$ 0
Residential [Member] | Real Estate Mortgage [Member]
Troubled Debt Restructurings Segregated by Class [Abstract]
Number of Loans | Loan		1		3	5
Pre-Modification Outstanding Recorded Investment		$ 305		$ 1,221	$ 1,902
Post-Modification Outstanding Balance		305		1,221	1,902
Residential [Member] | Real Estate Mortgage [Member] | Term Modification [Member]
Troubled Debt Restructurings Segregated by Class [Abstract]
Pre-Modification Outstanding Recorded Investment		305		305	593
Post-Modification Outstanding Balance	877	305	3,317	305	593
Residential [Member] | Real Estate Mortgage [Member] | Combination [Member]
Troubled Debt Restructurings Segregated by Class [Abstract]
Pre-Modification Outstanding Recorded Investment		0		916	1,309
Post-Modification Outstanding Balance	$ 209	$ 0	$ 427	$ 916	1,309
Residential [Member] | Real Estate Mortgage [Member] | Other [Member]
Troubled Debt Restructurings Segregated by Class [Abstract]
Pre-Modification Outstanding Recorded Investment					0
Post-Modification Outstanding Balance					$ 0

XML

Loans, Payment Status of Modified Loans to Borrowers Experiencing Financial Difficulty (Details) $ in Thousands	Jun. 30, 2023 USD ($)
Payment Status of Modified Loans to Borrowers Experiencing Financial Difficulty [Abstract]
Nonaccrual	$ 544
Current [Member]
Payment Status of Modified Loans to Borrowers Experiencing Financial Difficulty [Abstract]
Modified loans to borrowers experiencing financial difficulty	16,411
30 to 89 Days Past Due [Member]
Payment Status of Modified Loans to Borrowers Experiencing Financial Difficulty [Abstract]
Modified loans to borrowers experiencing financial difficulty	599
90+ Days Past Due [Member]
Payment Status of Modified Loans to Borrowers Experiencing Financial Difficulty [Abstract]
Modified loans to borrowers experiencing financial difficulty	118
Hotel/Motel [Member]
Payment Status of Modified Loans to Borrowers Experiencing Financial Difficulty [Abstract]
Nonaccrual	0
Hotel/Motel [Member] | Current [Member]
Payment Status of Modified Loans to Borrowers Experiencing Financial Difficulty [Abstract]
Modified loans to borrowers experiencing financial difficulty	0
Hotel/Motel [Member] | 30 to 89 Days Past Due [Member]
Payment Status of Modified Loans to Borrowers Experiencing Financial Difficulty [Abstract]
Modified loans to borrowers experiencing financial difficulty	0
Hotel/Motel [Member] | 90+ Days Past Due [Member]
Payment Status of Modified Loans to Borrowers Experiencing Financial Difficulty [Abstract]
Modified loans to borrowers experiencing financial difficulty	0
Commercial Real Estate Residential [Member]
Payment Status of Modified Loans to Borrowers Experiencing Financial Difficulty [Abstract]
Nonaccrual	0
Commercial Real Estate Residential [Member] | Current [Member]
Payment Status of Modified Loans to Borrowers Experiencing Financial Difficulty [Abstract]
Modified loans to borrowers experiencing financial difficulty	1,741
Commercial Real Estate Residential [Member] | 30 to 89 Days Past Due [Member]
Payment Status of Modified Loans to Borrowers Experiencing Financial Difficulty [Abstract]
Modified loans to borrowers experiencing financial difficulty	40
Commercial Real Estate Residential [Member] | 90+ Days Past Due [Member]
Payment Status of Modified Loans to Borrowers Experiencing Financial Difficulty [Abstract]
Modified loans to borrowers experiencing financial difficulty	0
Commercial Real Estate Nonresidential [Member]
Payment Status of Modified Loans to Borrowers Experiencing Financial Difficulty [Abstract]
Nonaccrual	0
Commercial Real Estate Nonresidential [Member] | Current [Member]
Payment Status of Modified Loans to Borrowers Experiencing Financial Difficulty [Abstract]
Modified loans to borrowers experiencing financial difficulty	9,373
Commercial Real Estate Nonresidential [Member] | 30 to 89 Days Past Due [Member]
Payment Status of Modified Loans to Borrowers Experiencing Financial Difficulty [Abstract]
Modified loans to borrowers experiencing financial difficulty	0
Commercial Real Estate Nonresidential [Member] | 90+ Days Past Due [Member]
Payment Status of Modified Loans to Borrowers Experiencing Financial Difficulty [Abstract]
Modified loans to borrowers experiencing financial difficulty	0
Dealer Floorplans [Member]
Payment Status of Modified Loans to Borrowers Experiencing Financial Difficulty [Abstract]
Nonaccrual	0
Dealer Floorplans [Member] | Current [Member]
Payment Status of Modified Loans to Borrowers Experiencing Financial Difficulty [Abstract]
Modified loans to borrowers experiencing financial difficulty	0
Dealer Floorplans [Member] | 30 to 89 Days Past Due [Member]
Payment Status of Modified Loans to Borrowers Experiencing Financial Difficulty [Abstract]
Modified loans to borrowers experiencing financial difficulty	0
Dealer Floorplans [Member] | 90+ Days Past Due [Member]
Payment Status of Modified Loans to Borrowers Experiencing Financial Difficulty [Abstract]
Modified loans to borrowers experiencing financial difficulty	0
Commercial Other [Member]
Payment Status of Modified Loans to Borrowers Experiencing Financial Difficulty [Abstract]
Nonaccrual	337
Commercial Other [Member] | Current [Member]
Payment Status of Modified Loans to Borrowers Experiencing Financial Difficulty [Abstract]
Modified loans to borrowers experiencing financial difficulty	1,145
Commercial Other [Member] | 30 to 89 Days Past Due [Member]
Payment Status of Modified Loans to Borrowers Experiencing Financial Difficulty [Abstract]
Modified loans to borrowers experiencing financial difficulty	292
Commercial Other [Member] | 90+ Days Past Due [Member]
Payment Status of Modified Loans to Borrowers Experiencing Financial Difficulty [Abstract]
Modified loans to borrowers experiencing financial difficulty	0
Real Estate Mortgage [Member]
Payment Status of Modified Loans to Borrowers Experiencing Financial Difficulty [Abstract]
Nonaccrual	185
Real Estate Mortgage [Member] | Current [Member]
Payment Status of Modified Loans to Borrowers Experiencing Financial Difficulty [Abstract]
Modified loans to borrowers experiencing financial difficulty	3,374
Real Estate Mortgage [Member] | 30 to 89 Days Past Due [Member]
Payment Status of Modified Loans to Borrowers Experiencing Financial Difficulty [Abstract]
Modified loans to borrowers experiencing financial difficulty	125
Real Estate Mortgage [Member] | 90+ Days Past Due [Member]
Payment Status of Modified Loans to Borrowers Experiencing Financial Difficulty [Abstract]
Modified loans to borrowers experiencing financial difficulty	118
Home Equity Lines [Member]
Payment Status of Modified Loans to Borrowers Experiencing Financial Difficulty [Abstract]
Nonaccrual	22
Home Equity Lines [Member] | Current [Member]
Payment Status of Modified Loans to Borrowers Experiencing Financial Difficulty [Abstract]
Modified loans to borrowers experiencing financial difficulty	168
Home Equity Lines [Member] | 30 to 89 Days Past Due [Member]
Payment Status of Modified Loans to Borrowers Experiencing Financial Difficulty [Abstract]
Modified loans to borrowers experiencing financial difficulty	59
Home Equity Lines [Member] | 90+ Days Past Due [Member]
Payment Status of Modified Loans to Borrowers Experiencing Financial Difficulty [Abstract]
Modified loans to borrowers experiencing financial difficulty	0
Consumer Direct [Member]
Payment Status of Modified Loans to Borrowers Experiencing Financial Difficulty [Abstract]
Nonaccrual	0
Consumer Direct [Member] | Current [Member]
Payment Status of Modified Loans to Borrowers Experiencing Financial Difficulty [Abstract]
Modified loans to borrowers experiencing financial difficulty	239
Consumer Direct [Member] | 30 to 89 Days Past Due [Member]
Payment Status of Modified Loans to Borrowers Experiencing Financial Difficulty [Abstract]
Modified loans to borrowers experiencing financial difficulty	5
Consumer Direct [Member] | 90+ Days Past Due [Member]
Payment Status of Modified Loans to Borrowers Experiencing Financial Difficulty [Abstract]
Modified loans to borrowers experiencing financial difficulty	0
Consumer Indirect [Member]
Payment Status of Modified Loans to Borrowers Experiencing Financial Difficulty [Abstract]
Nonaccrual	0
Consumer Indirect [Member] | Current [Member]
Payment Status of Modified Loans to Borrowers Experiencing Financial Difficulty [Abstract]
Modified loans to borrowers experiencing financial difficulty	371
Consumer Indirect [Member] | 30 to 89 Days Past Due [Member]
Payment Status of Modified Loans to Borrowers Experiencing Financial Difficulty [Abstract]
Modified loans to borrowers experiencing financial difficulty	78
Consumer Indirect [Member] | 90+ Days Past Due [Member]
Payment Status of Modified Loans to Borrowers Experiencing Financial Difficulty [Abstract]
Modified loans to borrowers experiencing financial difficulty	$ 0

XML

Other Real Estate Owned, Activity For Other Real Estate Owned (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Activity for other real estate owned [Roll Forward]
Beginning balance of other real estate owned	$ 2,776	$ 2,299	$ 3,671	$ 3,486
New assets acquired	124	307	175	444
Capitalized costs	40	73	40	73
Fair value adjustments	(25)	(23)	(106)	(269)
Sale of assets	(868)	(702)	(1,733)	(1,780)
Ending balance of other real estate owned	2,047	1,954	2,047	1,954
Carrying cost and fair value adjustments for foreclosed properties	$ 100	$ 100	$ 200	$ 400

XML

Other Real Estate Owned, Major Classifications of Foreclosed Properties (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Major Classifications of Foreclosed Properties [Abstract]
Total foreclosed properties	$ 2,047	$ 3,671
1-4 Family [Member]
Major Classifications of Foreclosed Properties [Abstract]
Total foreclosed properties	574	859
Construction/Land Development/Other [Member]
Major Classifications of Foreclosed Properties [Abstract]
Total foreclosed properties	683	867
Non-farm/Non-residential [Member]
Major Classifications of Foreclosed Properties [Abstract]
Total foreclosed properties	$ 790	$ 1,945

XML

Repurchase Agreements (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Financial Instruments Pledged as Collateral [Abstract]
Debt securities available-for-sale	$ 1,201,253	$ 1,256,226
Securities Sold under Agreements to Repurchase [Member]
Remaining contractual maturity of securities sold under agreements to repurchase by class of collateral pledged [Abstract]
Repurchase agreements and repurchase-to-maturity transactions	229,020	215,431
Securities Sold under Agreements to Repurchase [Member] | Asset Pledged as Collateral [Member]
Financial Instruments Pledged as Collateral [Abstract]
Debt securities available-for-sale	300,300	273,800
Overnight and Continuous [Member] | Securities Sold under Agreements to Repurchase [Member]
Remaining contractual maturity of securities sold under agreements to repurchase by class of collateral pledged [Abstract]
Repurchase agreements and repurchase-to-maturity transactions	143,881	136,574
Up to 30 Days [Member] | Securities Sold under Agreements to Repurchase [Member]
Remaining contractual maturity of securities sold under agreements to repurchase by class of collateral pledged [Abstract]
Repurchase agreements and repurchase-to-maturity transactions	11,000	500
30-90 Days [Member] | Securities Sold under Agreements to Repurchase [Member]
Remaining contractual maturity of securities sold under agreements to repurchase by class of collateral pledged [Abstract]
Repurchase agreements and repurchase-to-maturity transactions	0	65,000
Greater Than 90 Days [Member] | Securities Sold under Agreements to Repurchase [Member]
Remaining contractual maturity of securities sold under agreements to repurchase by class of collateral pledged [Abstract]
Repurchase agreements and repurchase-to-maturity transactions	74,139	13,357
U.S. Treasury and Government Agencies [Member]
Financial Instruments Pledged as Collateral [Abstract]
Debt securities available-for-sale	365,394	381,932
U.S. Treasury and Government Agencies [Member] | Securities Sold under Agreements to Repurchase [Member]
Remaining contractual maturity of securities sold under agreements to repurchase by class of collateral pledged [Abstract]
Repurchase agreements and repurchase-to-maturity transactions	44,559	26,524
U.S. Treasury and Government Agencies [Member] | Overnight and Continuous [Member] | Securities Sold under Agreements to Repurchase [Member]
Remaining contractual maturity of securities sold under agreements to repurchase by class of collateral pledged [Abstract]
Repurchase agreements and repurchase-to-maturity transactions	19,951	21,679
U.S. Treasury and Government Agencies [Member] | Up to 30 Days [Member] | Securities Sold under Agreements to Repurchase [Member]
Remaining contractual maturity of securities sold under agreements to repurchase by class of collateral pledged [Abstract]
Repurchase agreements and repurchase-to-maturity transactions	2,000	34
U.S. Treasury and Government Agencies [Member] | 30-90 Days [Member] | Securities Sold under Agreements to Repurchase [Member]
Remaining contractual maturity of securities sold under agreements to repurchase by class of collateral pledged [Abstract]
Repurchase agreements and repurchase-to-maturity transactions	0	2,979
U.S. Treasury and Government Agencies [Member] | Greater Than 90 Days [Member] | Securities Sold under Agreements to Repurchase [Member]
Remaining contractual maturity of securities sold under agreements to repurchase by class of collateral pledged [Abstract]
Repurchase agreements and repurchase-to-maturity transactions	22,608	1,832
State and Political Subdivisions [Member]
Financial Instruments Pledged as Collateral [Abstract]
Debt securities available-for-sale	259,825	265,102
State and Political Subdivisions [Member] | Securities Sold under Agreements to Repurchase [Member]
Remaining contractual maturity of securities sold under agreements to repurchase by class of collateral pledged [Abstract]
Repurchase agreements and repurchase-to-maturity transactions	108,546	108,867
State and Political Subdivisions [Member] | Overnight and Continuous [Member] | Securities Sold under Agreements to Repurchase [Member]
Remaining contractual maturity of securities sold under agreements to repurchase by class of collateral pledged [Abstract]
Repurchase agreements and repurchase-to-maturity transactions	99,257	96,627
State and Political Subdivisions [Member] | Up to 30 Days [Member] | Securities Sold under Agreements to Repurchase [Member]
Remaining contractual maturity of securities sold under agreements to repurchase by class of collateral pledged [Abstract]
Repurchase agreements and repurchase-to-maturity transactions	1,391	466
State and Political Subdivisions [Member] | 30-90 Days [Member] | Securities Sold under Agreements to Repurchase [Member]
Remaining contractual maturity of securities sold under agreements to repurchase by class of collateral pledged [Abstract]
Repurchase agreements and repurchase-to-maturity transactions	0	9,634
State and Political Subdivisions [Member] | Greater Than 90 Days [Member] | Securities Sold under Agreements to Repurchase [Member]
Remaining contractual maturity of securities sold under agreements to repurchase by class of collateral pledged [Abstract]
Repurchase agreements and repurchase-to-maturity transactions	7,898	2,140
U.S. Government Sponsored Agency Mortgage-backed Securities [Member]
Financial Instruments Pledged as Collateral [Abstract]
Debt securities available-for-sale	487,899	520,085
U.S. Government Sponsored Agency Mortgage-backed Securities [Member] | Securities Sold under Agreements to Repurchase [Member]
Remaining contractual maturity of securities sold under agreements to repurchase by class of collateral pledged [Abstract]
Repurchase agreements and repurchase-to-maturity transactions	74,794	79,736
U.S. Government Sponsored Agency Mortgage-backed Securities [Member] | Overnight and Continuous [Member] | Securities Sold under Agreements to Repurchase [Member]
Remaining contractual maturity of securities sold under agreements to repurchase by class of collateral pledged [Abstract]
Repurchase agreements and repurchase-to-maturity transactions	23,552	17,964
U.S. Government Sponsored Agency Mortgage-backed Securities [Member] | Up to 30 Days [Member] | Securities Sold under Agreements to Repurchase [Member]
Remaining contractual maturity of securities sold under agreements to repurchase by class of collateral pledged [Abstract]
Repurchase agreements and repurchase-to-maturity transactions	7,609	0
U.S. Government Sponsored Agency Mortgage-backed Securities [Member] | 30-90 Days [Member] | Securities Sold under Agreements to Repurchase [Member]
Remaining contractual maturity of securities sold under agreements to repurchase by class of collateral pledged [Abstract]
Repurchase agreements and repurchase-to-maturity transactions	0	52,387
U.S. Government Sponsored Agency Mortgage-backed Securities [Member] | Greater Than 90 Days [Member] | Securities Sold under Agreements to Repurchase [Member]
Remaining contractual maturity of securities sold under agreements to repurchase by class of collateral pledged [Abstract]
Repurchase agreements and repurchase-to-maturity transactions	43,633	9,385
Asset-backed Securities [Member]
Financial Instruments Pledged as Collateral [Abstract]
Debt securities available-for-sale	88,135	89,107
Asset-backed Securities [Member] | Securities Sold under Agreements to Repurchase [Member]
Remaining contractual maturity of securities sold under agreements to repurchase by class of collateral pledged [Abstract]
Repurchase agreements and repurchase-to-maturity transactions	1,121	304
Asset-backed Securities [Member] | Overnight and Continuous [Member] | Securities Sold under Agreements to Repurchase [Member]
Remaining contractual maturity of securities sold under agreements to repurchase by class of collateral pledged [Abstract]
Repurchase agreements and repurchase-to-maturity transactions	1,121	304
Asset-backed Securities [Member] | Up to 30 Days [Member] | Securities Sold under Agreements to Repurchase [Member]
Remaining contractual maturity of securities sold under agreements to repurchase by class of collateral pledged [Abstract]
Repurchase agreements and repurchase-to-maturity transactions	0	0
Asset-backed Securities [Member] | 30-90 Days [Member] | Securities Sold under Agreements to Repurchase [Member]
Remaining contractual maturity of securities sold under agreements to repurchase by class of collateral pledged [Abstract]
Repurchase agreements and repurchase-to-maturity transactions	0	0
Asset-backed Securities [Member] | Greater Than 90 Days [Member] | Securities Sold under Agreements to Repurchase [Member]
Remaining contractual maturity of securities sold under agreements to repurchase by class of collateral pledged [Abstract]
Repurchase agreements and repurchase-to-maturity transactions	$ 0	$ 0

XML

Fair Value of Financial Assets and Liabilities, Fair Value Measurements of Assets Measured on Recurring Basis (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Assets measured - recurring basis [Abstract]
Debt securities available-for-sale	$ 1,201,253	$ 1,256,226
Equity securities at fair value	2,545	2,166
U.S. Treasury and Government Agencies [Member]
Assets measured - recurring basis [Abstract]
Debt securities available-for-sale	365,394	381,932
State and Political Subdivisions [Member]
Assets measured - recurring basis [Abstract]
Debt securities available-for-sale	259,825	265,102
U.S. Government Sponsored Agency Mortgage-backed Securities [Member]
Assets measured - recurring basis [Abstract]
Debt securities available-for-sale	487,899	520,085
Asset-backed Securities [Member]
Assets measured - recurring basis [Abstract]
Debt securities available-for-sale	88,135	89,107
Recurring [Member]
Assets measured - recurring basis [Abstract]
Equity securities at fair value	2,545	2,166
Mortgage servicing rights	8,230	8,468
Recurring [Member] | U.S. Treasury and Government Agencies [Member]
Assets measured - recurring basis [Abstract]
Debt securities available-for-sale	365,394	381,932
Recurring [Member] | State and Political Subdivisions [Member]
Assets measured - recurring basis [Abstract]
Debt securities available-for-sale	259,825	265,102
Recurring [Member] | U.S. Government Sponsored Agency Mortgage-backed Securities [Member]
Assets measured - recurring basis [Abstract]
Debt securities available-for-sale	487,899	520,085
Recurring [Member] | Asset-backed Securities [Member]
Assets measured - recurring basis [Abstract]
Debt securities available-for-sale	88,135	89,107
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Recurring [Member]
Assets measured - recurring basis [Abstract]
Equity securities at fair value	0	0
Mortgage servicing rights	0	0
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Recurring [Member] | U.S. Treasury and Government Agencies [Member]
Assets measured - recurring basis [Abstract]
Debt securities available-for-sale	341,199	346,265
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Recurring [Member] | State and Political Subdivisions [Member]
Assets measured - recurring basis [Abstract]
Debt securities available-for-sale	0	0
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Recurring [Member] | U.S. Government Sponsored Agency Mortgage-backed Securities [Member]
Assets measured - recurring basis [Abstract]
Debt securities available-for-sale	0	0
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Recurring [Member] | Asset-backed Securities [Member]
Assets measured - recurring basis [Abstract]
Debt securities available-for-sale	0	0
Significant Other Observable Inputs (Level 2) [Member] | Recurring [Member]
Assets measured - recurring basis [Abstract]
Equity securities at fair value	0	0
Mortgage servicing rights	0	0
Significant Other Observable Inputs (Level 2) [Member] | Recurring [Member] | U.S. Treasury and Government Agencies [Member]
Assets measured - recurring basis [Abstract]
Debt securities available-for-sale	24,195	35,667
Significant Other Observable Inputs (Level 2) [Member] | Recurring [Member] | State and Political Subdivisions [Member]
Assets measured - recurring basis [Abstract]
Debt securities available-for-sale	259,825	265,102
Significant Other Observable Inputs (Level 2) [Member] | Recurring [Member] | U.S. Government Sponsored Agency Mortgage-backed Securities [Member]
Assets measured - recurring basis [Abstract]
Debt securities available-for-sale	487,899	520,085
Significant Other Observable Inputs (Level 2) [Member] | Recurring [Member] | Asset-backed Securities [Member]
Assets measured - recurring basis [Abstract]
Debt securities available-for-sale	88,135	89,107
Significant Unobservable Inputs (Level 3) [Member] | Recurring [Member]
Assets measured - recurring basis [Abstract]
Equity securities at fair value	2,545	2,166
Mortgage servicing rights	8,230	8,468
Significant Unobservable Inputs (Level 3) [Member] | Recurring [Member] | U.S. Treasury and Government Agencies [Member]
Assets measured - recurring basis [Abstract]
Debt securities available-for-sale	0	0
Significant Unobservable Inputs (Level 3) [Member] | Recurring [Member] | State and Political Subdivisions [Member]
Assets measured - recurring basis [Abstract]
Debt securities available-for-sale	0	0
Significant Unobservable Inputs (Level 3) [Member] | Recurring [Member] | U.S. Government Sponsored Agency Mortgage-backed Securities [Member]
Assets measured - recurring basis [Abstract]
Debt securities available-for-sale	0	0
Significant Unobservable Inputs (Level 3) [Member] | Recurring [Member] | Asset-backed Securities [Member]
Assets measured - recurring basis [Abstract]
Debt securities available-for-sale	$ 0	$ 0

XML

Fair Value of Financial Assets and Liabilities, Level 3 Reconciliation and Noninterest Income (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Noninterest Income [Abstract]
Total gains	$ 227	$ 25	$ 44	$ 869
Recurring [Member] | Equity Securities [Member]
Reconciliation of beginning and ending balances of recurring fair value measurements recognized in balance sheet using significant unobservable (Level 3) inputs [Roll Forward]
Beginning balance	2,380	2,352	2,166	2,253
Total unrealized gains (losses) included in net income	165	(224)	379	(125)
Issues	0	0	0	0
Settlements	0	0	0	0
Ending balance	2,545	2,128	2,545	2,128
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	165	(224)	379	(125)
Recurring [Member] | Mortgage Servicing Rights [Member]
Reconciliation of beginning and ending balances of recurring fair value measurements recognized in balance sheet using significant unobservable (Level 3) inputs [Roll Forward]
Beginning balance	8,121	7,748	8,468	6,774
Total unrealized gains (losses) included in net income	80	468	(134)	1,451
Issues	46	223	96	452
Settlements	(17)	(219)	(200)	(457)
Ending balance	8,230	8,220	8,230	8,220
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	$ 80	$ 468	$ (134)	$ 1,451

XML

Fair Value of Financial Assets and Liabilities, Fair Value Measurements of Assets Measured on Nonrecurring Basis (Details) - USD ($) $ in Thousands	3 Months Ended	6 Months Ended	12 Months Ended
	Jun. 30, 2023	Jun. 30, 2023	Dec. 31, 2022
Assets measured-nonrecurring basis [Abstract]
Collateral dependent loans			$ 2,703
Minimum [Member]
Other real estate owned [Abstract]
Typical frequency of periodic reviews		12 months
Maximum [Member]
Other real estate owned [Abstract]
Typical frequency of periodic reviews		18 months
Frequency of periodic reviews in general		24 months
Nonrecurring [Member]
Assets measured-nonrecurring basis [Abstract]
Collateral dependent loans	$ 0	$ 0
Other real estate owned [Abstract]
Other real estate owned, fair value adjustment	25	106	285
Nonrecurring [Member] | Fair Value [Member]
Assets measured-nonrecurring basis [Abstract]
Collateral dependent loans			2,703
Other real estate owned	177	177	570
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Nonrecurring [Member] | Fair Value [Member]
Assets measured-nonrecurring basis [Abstract]
Collateral dependent loans			0
Other real estate owned	0	0	0
Significant Other Observable Inputs (Level 2) [Member] | Nonrecurring [Member] | Fair Value [Member]
Assets measured-nonrecurring basis [Abstract]
Collateral dependent loans			0
Other real estate owned	0	0	0
Significant Unobservable Inputs (Level 3) [Member] | Nonrecurring [Member] | Fair Value [Member]
Assets measured-nonrecurring basis [Abstract]
Collateral dependent loans			2,703
Other real estate owned	$ 177	$ 177	$ 570

XML

Fair Value of Financial Assets and Liabilities, Quantitative Information about Level 3 Fair Value Measurements (Details) $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2023 USD ($)	Dec. 31, 2022 USD ($)
Quantitative Information about Unobservable Inputs Used in Level 3 Fair Value Measurements [Abstract]
Equity securities at fair value	$ 2,545	$ 2,166
Mortgage servicing rights	8,230	8,468
Collateral dependent loans		2,703
Other real estate owned	$ 177	$ 570
Conversion Rate [Member]
Quantitative Information about Unobservable Inputs Used in Level 3 Fair Value Measurements [Abstract]
Equity securities at fair value, measurement input	1.5902
Dividend Rate [Member]
Quantitative Information about Unobservable Inputs Used in Level 3 Fair Value Measurements [Abstract]
Equity securities at fair value, measurement input	0.7156
Significant Unobservable Inputs (Level 3) [Member] | Valuation, Income Approach [Member] | Discount Rate [Member] | Minimum [Member]
Quantitative Information about Unobservable Inputs Used in Level 3 Fair Value Measurements [Abstract]
Equity securities at fair value, measurement input	0.08	0.08
Mortgage servicing rights, measurement input	0.095	0.095
Significant Unobservable Inputs (Level 3) [Member] | Valuation, Income Approach [Member] | Discount Rate [Member] | Maximum [Member]
Quantitative Information about Unobservable Inputs Used in Level 3 Fair Value Measurements [Abstract]
Equity securities at fair value, measurement input	0.12	0.12
Mortgage servicing rights, measurement input	0.115	0.12
Significant Unobservable Inputs (Level 3) [Member] | Valuation, Income Approach [Member] | Discount Rate [Member] | Weighted Average [Member]
Quantitative Information about Unobservable Inputs Used in Level 3 Fair Value Measurements [Abstract]
Equity securities at fair value, measurement input	0.10	0.10
Mortgage servicing rights, measurement input	0.10	0.10
Significant Unobservable Inputs (Level 3) [Member] | Valuation, Income Approach [Member] | Conversion Date [Member] | Minimum [Member]
Quantitative Information about Unobservable Inputs Used in Level 3 Fair Value Measurements [Abstract]
Equity securities at fair value, measurement input, conversion date	Dec. 31, 2025	Dec. 31, 2025
Significant Unobservable Inputs (Level 3) [Member] | Valuation, Income Approach [Member] | Conversion Date [Member] | Maximum [Member]
Quantitative Information about Unobservable Inputs Used in Level 3 Fair Value Measurements [Abstract]
Equity securities at fair value, measurement input, conversion date	Dec. 31, 2029	Dec. 31, 2029
Significant Unobservable Inputs (Level 3) [Member] | Valuation, Income Approach [Member] | Conversion Date [Member] | Weighted Average [Member]
Quantitative Information about Unobservable Inputs Used in Level 3 Fair Value Measurements [Abstract]
Equity securities at fair value, measurement input, conversion date	Dec. 31, 2027	Dec. 31, 2027
Significant Unobservable Inputs (Level 3) [Member] | Valuation, Income Approach [Member] | Constant Prepayment Rate [Member] | Minimum [Member]
Quantitative Information about Unobservable Inputs Used in Level 3 Fair Value Measurements [Abstract]
Mortgage servicing rights, measurement input	0	0.065
Significant Unobservable Inputs (Level 3) [Member] | Valuation, Income Approach [Member] | Constant Prepayment Rate [Member] | Maximum [Member]
Quantitative Information about Unobservable Inputs Used in Level 3 Fair Value Measurements [Abstract]
Mortgage servicing rights, measurement input	0.267	0.28
Significant Unobservable Inputs (Level 3) [Member] | Valuation, Income Approach [Member] | Constant Prepayment Rate [Member] | Weighted Average [Member]
Quantitative Information about Unobservable Inputs Used in Level 3 Fair Value Measurements [Abstract]
Mortgage servicing rights, measurement input	0.074	0.071
Significant Unobservable Inputs (Level 3) [Member] | Valuation, Income Approach [Member] | Probability of Default [Member] | Minimum [Member]
Quantitative Information about Unobservable Inputs Used in Level 3 Fair Value Measurements [Abstract]
Mortgage servicing rights, measurement input	0	0
Significant Unobservable Inputs (Level 3) [Member] | Valuation, Income Approach [Member] | Probability of Default [Member] | Maximum [Member]
Quantitative Information about Unobservable Inputs Used in Level 3 Fair Value Measurements [Abstract]
Mortgage servicing rights, measurement input	1	1
Significant Unobservable Inputs (Level 3) [Member] | Valuation, Income Approach [Member] | Probability of Default [Member] | Weighted Average [Member]
Quantitative Information about Unobservable Inputs Used in Level 3 Fair Value Measurements [Abstract]
Mortgage servicing rights, measurement input	0.013	0.012
Significant Unobservable Inputs (Level 3) [Member] | Market Comparable Properties [Member] | Marketability Discount [Member] | Minimum [Member]
Quantitative Information about Unobservable Inputs Used in Level 3 Fair Value Measurements [Abstract]
Collateral dependent loans, measurement input		0.52
Significant Unobservable Inputs (Level 3) [Member] | Market Comparable Properties [Member] | Marketability Discount [Member] | Maximum [Member]
Quantitative Information about Unobservable Inputs Used in Level 3 Fair Value Measurements [Abstract]
Collateral dependent loans, measurement input		0.52
Significant Unobservable Inputs (Level 3) [Member] | Market Comparable Properties [Member] | Marketability Discount [Member] | Weighted Average [Member]
Quantitative Information about Unobservable Inputs Used in Level 3 Fair Value Measurements [Abstract]
Collateral dependent loans, measurement input		0.52
Significant Unobservable Inputs (Level 3) [Member] | Market Comparable Properties [Member] | Comparability Adjustment [Member] | Minimum [Member]
Quantitative Information about Unobservable Inputs Used in Level 3 Fair Value Measurements [Abstract]
Other real estate owned, measurement input	0	0.10
Significant Unobservable Inputs (Level 3) [Member] | Market Comparable Properties [Member] | Comparability Adjustment [Member] | Maximum [Member]
Quantitative Information about Unobservable Inputs Used in Level 3 Fair Value Measurements [Abstract]
Other real estate owned, measurement input	0.10	0.306
Significant Unobservable Inputs (Level 3) [Member] | Market Comparable Properties [Member] | Comparability Adjustment [Member] | Weighted Average [Member]
Quantitative Information about Unobservable Inputs Used in Level 3 Fair Value Measurements [Abstract]
Other real estate owned, measurement input	0.10	0.109

XML

Fair Value of Financial Assets and Liabilities, Estimated Fair Value of Financial Instruments (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Financial assets [Abstract]
Debt securities available-for-sale	$ 1,201,253	$ 1,256,226
Equity securities at fair value	2,545	2,166
Federal Reserve Bank stock	4,887	4,887
Carrying Amount [Member]
Financial assets [Abstract]
Cash and cash equivalents	109,545	128,686
Certificates of deposit in other banks	245	245
Debt securities available-for-sale	1,201,253	1,256,226
Equity securities at fair value	2,545	2,166
Loans held for sale	238	109
Loans, net	3,881,677	3,663,309
Federal Home Loan Bank stock	6,545	6,676
Federal Reserve Bank stock	4,887	4,887
Accrued interest receivable	20,257	19,592
Financial liabilities [Abstract]
Deposits	4,516,660	4,426,143
Repurchase agreements	229,020	215,431
Federal funds purchased	500	500
Advances from Federal Home Loan Bank	345	355
Long-term debt	64,350	57,841
Accrued interest payable	5,624	2,237
Unrecognized financial instruments [Abstract]
Letters of credit	0	0
Commitments to extend credit	0	0
Forward sale commitments	0	0
Fair Value [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member]
Financial assets [Abstract]
Cash and cash equivalents	109,545	128,686
Certificates of deposit in other banks	0	0
Debt securities available-for-sale	341,199	346,265
Equity securities at fair value	0	0
Loans held for sale	244	112
Loans, net	0	0
Federal Home Loan Bank stock	0	0
Federal Reserve Bank stock	0	0
Accrued interest receivable	0	0
Financial liabilities [Abstract]
Deposits	1,361,078	1,394,915
Repurchase agreements	0	0
Federal funds purchased	0	0
Advances from Federal Home Loan Bank	0	0
Long-term debt	0	0
Accrued interest payable	0	0
Unrecognized financial instruments [Abstract]
Letters of credit	0	0
Commitments to extend credit	0	0
Forward sale commitments	0	0
Fair Value [Member] | Significant Other Observable Inputs (Level 2) [Member]
Financial assets [Abstract]
Cash and cash equivalents	0	0
Certificates of deposit in other banks	245	245
Debt securities available-for-sale	860,054	909,961
Equity securities at fair value	0	0
Loans held for sale	0	0
Loans, net	0	0
Federal Home Loan Bank stock	6,545	6,676
Federal Reserve Bank stock	4,887	4,887
Accrued interest receivable	20,257	19,592
Financial liabilities [Abstract]
Deposits	3,163,628	3,050,144
Repurchase agreements	0	0
Federal funds purchased	500	500
Advances from Federal Home Loan Bank	242	380
Long-term debt	0	0
Accrued interest payable	5,624	2,237
Unrecognized financial instruments [Abstract]
Letters of credit	0	0
Commitments to extend credit	0	0
Forward sale commitments	0	0
Fair Value [Member] | Significant Unobservable Inputs (Level 3) [Member]
Financial assets [Abstract]
Cash and cash equivalents	0	0
Certificates of deposit in other banks	0	0
Debt securities available-for-sale	0	0
Equity securities at fair value	2,545	2,166
Loans held for sale	0	0
Loans, net	3,717,729	3,511,810
Federal Home Loan Bank stock	0	0
Federal Reserve Bank stock	0	0
Accrued interest receivable	0	0
Financial liabilities [Abstract]
Deposits	0	0
Repurchase agreements	229,277	215,542
Federal funds purchased	0	0
Advances from Federal Home Loan Bank	0	0
Long-term debt	52,043	55,860
Accrued interest payable	0	0
Unrecognized financial instruments [Abstract]
Letters of credit	0	0
Commitments to extend credit	0	0
Forward sale commitments	$ 0	$ 0

XML

Revenue Recognition (Details) $ in Millions	6 Months Ended
	Jun. 30, 2023 USD ($) Segment
Revenue Recognition [Abstract]
Contract assets	$ 0
Contract liabilities	0
Receivable accounts for contracts with customers	$ 0
Number of operating segments | Segment	1

XML

Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Numerator [Abstract]
Net income	$ 19,404	$ 20,271	$ 38,717	$ 39,999
Basic earnings per share [Abstract]
Weighted average shares (in shares)	17,884,000	17,835,000	17,877,000	17,827,000
Diluted earnings per share [Abstract]
Effect of dilutive stock options and restricted stock grants (in shares)	6,000	8,000	8,000	11,000
Adjusted weighted average shares (in shares)	17,890,000	17,843,000	17,885,000	17,838,000
Earnings per share [Abstract]
Basic earnings per share (in dollars per share)	$ 1.09	$ 1.14	$ 2.17	$ 2.24
Diluted earnings per share (in dollars per share)	$ 1.08	$ 1.14	$ 2.16	$ 2.24
Options [Member]
Earnings Per Share [Abstract]
Options excluded from diluted calculations (in shares)	0	0	0	0

XML

Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Amounts Reclassified from Accumulated Other Comprehensive Income (Loss) (AOCI) [Abstract]
Securities gains (losses)	$ 165	$ (225)	$ 383	$ (126)
Tax expense (benefit)	5,397	4,965	10,676	10,000
Net income	19,404	20,271	38,717	39,999
Unrealized Gains (Losses) on AFS Securities [Member] | Reclassification Out of Accumulated Other Comprehensive Income [Member]
Amounts Reclassified from Accumulated Other Comprehensive Income (Loss) (AOCI) [Abstract]
Securities gains (losses)	0	(1)	4	(1)
Tax expense (benefit)	0	0	1	0
Net income	$ 0	$ (1)	$ 3	$ (1)