COMMUNITY TRUST BANCORP INC /KY/
For the period ended Dec 31, 2025. Filed Feb 27, 2026.
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A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2025 · Filed Feb 27, 2026
CTBI$69.11-0.3%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2024-12-31; filed 2025-02-28.
0001140361-25-006428
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2025-12-31; filed 2026-02-27.
0001140361-26-007058
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 93 previous paragraphs and 86 current paragraphs.
51 unchanged; 28 reworded; 7 added; 13 removed; 1 previous and 0 current paragraphs rearranged.
Tables are not compared: 33 previous and 24 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (7)
Current report
Noninterest income for the year 2025 was impacted year over year by increases in trust and wealth management income ($1.9 million), insurance commissions ($0.4 million), and net gains on the sale of fixed assets ($0.5 million), partially offset by decreases in loan related fees ($0.9 million), securities gains ($0.3 million), and bank owned life insurance revenue ($0.8 million). The decrease in loan related fees resulted primarily from the fluctuation in the fair market value of our mortgage servicing rights. The variance in securities gains primarily resulted from changes in the valuation of our equity securities.
Current report
In an attempt to modernize our delivery channel in the Mt. Sterling Market, we consolidated two of our branches into a newly constructed modern branch which opened in February 2026. During the fourth quarter of 2025, we recognized the sale of one of the branch locations, along with a parking lot, resulting in a $0.5 million gain on the sale of fixed assets. We also donated one of the branch locations, which resulted in a $0.4 million contribution expense.
Current report
Noninterest expense for the year 2025 was primarily impacted by increased expenses year over year in personnel ($6.1 million), data processing ($1.5 million), occupancy and equipment ($1.0 million), taxes other than property and payroll ($0.6 million), legal fees ($0.5 million), and contributions ($0.7 million). The year over year increase in personnel expense included increases in salaries ($2.1 million), bonuses and incentives ($1.9 million), and other employee benefits ($2.1 million). The increase in contribution expense was primarily a result of the $0.4 million contribution expense resulting from a donation of one of our Mt. Sterling branch locations discussed above in the Noninterest Income section.
Current report
Allowance for Credit Losses
Current report
Maturities of uninsured certificates of deposit and other time deposits are presented below:
Current report
As of December 31, 2025, we had approximately $1.6 million in uninsured deposits. CTBI has no brokered deposits.
Current report
Critical Accounting Estimates
Removed paragraphs (13)
Previous report
*Yield on average earning assets and net interest margin are computed on a taxable equivalent basis using a 24.95% tax rate.
Previous report
Noninterest income for the year 2024 was $62.6 million compared to $57.7 million for the year 2023. Noninterest income was impacted year over year by a $1.2 million increase in loan related fees, a $1.9 million increase in trust revenue, and a $1.7 million increase in bank owned life insurance revenue.
Previous report
Noninterest expense for the year 2024 was $130.9 million compared to $125.4 million for the year 2023. Noninterest expense was primarily impacted year over year by a $5.7 million increase in personnel expense and a $1.4 million increase in data processing expense, partially offset by thepositive impact to other direct expenses of the accounting method change related to investments in tax credit structures (ASU No. 2023-02). The increase in personnel expense included a $1.4 million increase in salaries, a $2.2 million increase in bonuses, and a $2.4 million increase in the cost of group medical and life insurance.
Previous report
Average Deposits and Other Borrowed Funds
Previous report
The maximum balance for federal funds purchased and repurchase agreements at any month-end during 2024 occurred at December 31, 2024, with a month-end balance of $240.7 million. The maximum balance for federal funds purchased and repurchase agreements at any month-end during 2023 occurred at October 31, 2023, with a month-end balance of $235.0 million.
Previous report
On March 5, 2021, the London Interbank Offered Rate’s (“LIBOR”) administrator, ICE Benchmarks Administration, announced that LIBOR would no longer be provided (i) for the one-week and two-month U.S. dollar settings after December 31, 2021 and (ii) for the remaining U.S. dollar settings after June 30, 2023. The U.S. federal banking agencies issued supervisory guidance encouraging banks to stop entering into new contracts that use LIBOR as a reference rate after December 31, 2021. In addition, on March 15, 2022, the Adjustable Interest Rate (LIBOR) Act (the “LIBOR Act”) was signed into law. The LIBOR Act establishes a uniform national approach for replacing LIBOR in legacy contracts that do not provide for the use of a clearly defined replacement benchmark rate. As directed by the LIBOR Act, on December 16, 2022, the Federal Reserve Board issued a final rule setting forth regulations to implement the LIBOR Act, including establishing benchmark replacements based on the Secured Overnight Funding Rate for contracts governed by U.S. law that reference certain tenors of U.S. dollar LIBOR (the overnight and one-, three-, six-, and twelve-month tenors) and that do not have terms that provide for the use of a clearly defined and predictable replacement benchmark rate (“fallback provisions”) following the first London banking day after June 30, 2023. We have analyzed our financial exposure related to the discontinuation of LIBOR and consider our exposure to be insignificant.
Previous report
Maturities and/or repricing of time deposits of $100,000 or more outstanding at December 31, 2024 are summarized as follows:
Previous report
Critical Accounting Policies and Estimates
Previous report
Allowance for Credit Losses– CTBI accounts for the ACL and the reserve for unfunded commitments in accordance with 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.
Previous report
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 ASU 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 consolidated financial statements contained herein.
Previous report
Goodwill –Business combinations entered into by CTBI typically include the recognition of goodwill. GAAP requires 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 consolidated financial statements contained herein for a discussion on the methodology used by CTBI to assess goodwill for impairment.
Previous report
Impairment exists when a reporting unit’s carrying amount of goodwill exceeds its implied fair value. In testing goodwill for impairment, 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.
Previous report
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.
Reworded paragraphs (28)
Previous wording
The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is intended to help the reader understand Community Trust Bancorp, Inc., our operations, and our present business environment. The MD&A is provided as a supplement to—and should be read in conjunction with—our consolidated financial statements and the accompanying notes thereto contained in Item 8 of this annual report. The MD&A includes the following sections:
Current wording
The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is intended to help the reader understand Community Trust Bancorp, Inc., our operations, and our present business environment. The MD&A is provided as a supplement to—and should be read in conjunction with—our consolidated financial statements and the accompanying notes thereto contained in Item 8 of this annual report.
Previous wording
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 eighty-one 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 December 31, 2024, we had total consolidated assets of $6.2 billion and total consolidated deposits, including repurchase agreements, of $5.3 billion. Total shareholders’ equity at December 31, 2024 was $757.6 million. Trust assets under management at December 31, 2024 were $3.7 billion, including CTB’s investment portfolio totaling $1.1 billion.
Current wording
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 eighty-one banking locations in eastern, northern, 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 December 31, 2025, we had total consolidated assets of $6.7 billion and total consolidated deposits, including repurchase agreements, of $5.7 billion. Total shareholders’ equity at December 31, 2025 was $856.1 million. Trust assets under management at December 31, 2025 were $4.1 billion, including CTB’s investment portfolio totaling $1.1 billion.
Previous wording
We reported earnings of $82.8 million, or $4.61 per basic share, for the year ended December 31, 2024 compared to $78.0 million, or $4.36 per basic share, for the year ended December 31, 2023. Total revenue for 2024 was $17.8 million above prior year, as net interest revenue increased $12.9 million and noninterest income increased $4.9 million compared to prior year. Our provision for credit losses for 2024 increased $4.1 million over prior year, and our noninterest expense increased $5.5 million over prior year. Noninterest expense and tax expense were impacted by an accounting method change (Accounting Standards Update (“ASU”) No. 2023-02), which is intended to improve the accounting and disclosures for investments in tax credit structures. Historically, the amortization expense related to our tax credits had been booked to noninterest expense. Beginning in January 2024, the amortization expense is now booked to tax expense. We had a decrease in amortization expense, recognized in other direct expenses, that totaled $2.6 million for the year ended December 31, 2023. The amortization expense included in income tax expense was $3.0 million for the year ended December 31, 2024. The amount of income tax credits and other tax benefits recognized was $4.3 million for the year ended December 31, 2024.
Current wording
We reported record earnings of $98.1 million, or $5.44 per basic share, for the year ended December 31, 2025 compared to $82.8 million, or $4.61 per basic share, for the year ended December 31, 2024. Total revenue for 2025 was $34.0 million above prior year, as net interest revenue increased $33.0 million and noninterest income increased $1.1 million compared to prior year. Our provision for credit losses for 2025 increased $1.5 million over prior year, and our noninterest expense increased $12.1 million over prior year.
Previous wording
(1) Interest includes fees on loans of $1,998 and $1,770 in 2024 and 2023, respectively.
Current wording
(1) Interest includes fees on loans of $2,284 and $1,998 in 2025 and 2024, respectively.
Previous wording
Net interest income for the year ended December 31, 2024 of $186.0 million increased $12.9 million, or 7.4%, from prior year with an increase in average earning assets for the year 2024 of $325.8 million, or 6.2%. Our yield on average earning assets for the year 2024 increased 50 basis points from prior year, and our cost of interest bearing funds increased 58 basis points during the same time period. Our net interest margin, on a fully tax equivalent basis, for the year 2024 increased 4 basis points from the year ended December 31, 2023. Average loans to deposits, including repurchase agreements, for the year ended December 31, 2024 were 84.3% compared to 81.5% for the year ended December 31, 2023.
Current wording
Net interest income for the year ended December 31, 2025 of $219.0 million increased $33.0 million, or 17.7%, from prior year with an increase in average earning assets for the year 2025 of $507.6 million, or 9.1%. Our yield on average earning assets for the year 2025 increased 6 basis points from prior year, while our cost of interest bearing funds decreased 35 basis points. Our net interest margin, on a fully tax equivalent basis, for the year 2025 increased 26 basis points from the year ended December 31, 2024. Average loans to deposits, including repurchase agreements, for the year ended December 31, 2025 were 85.8% compared to 84.3% for the year ended December 31, 2024.
Previous wording
Provision for credit losses for the year 2024 was $11.0 million compared to $6.8 million during the year 2023. See below for discussion of our allowance for credit losses.
Current wording
Provision for credit losses for the year 2025 was $12.4 million compared to $11.0 million during the year 2024. Of the provision for the year, $12.5 million was allotted to fund changes in loan volume and composition, $0.1 million was allotted based on quantitative and qualitative factors, and $0.2 million was credited against the provision for unfunded commitments. See below for discussion of our allowance for credit losses.
Previous wording
CTBI’s total assets at $6.2 billion increased $423.5 million, or 7.3%, from December 31, 2023. Loans outstanding at December 31, 2024 were $4.5 billion, increasing $435.7 million, or 10.8%, year over year. The increase in loans from prior year included a $288.9 million increase in the commercial loan portfolio, a $126.3 million increase in the residential loan portfolio, and a $26.8 million increase in the indirect loan portfolio, partially offset by a $6.3 million decrease in the consumer direct loan portfolio. CTBI’s investment portfolio decreased $107.4 million, or 9.2%, from December 31, 2023. Deposits in other banks increased $83.9 million from December 31, 2023. Deposits, including repurchase agreements, at $5.3 billion increased $360.5 million, or 7.3%, from December 31, 2023.
Current wording
CTBI’s total assets at $6.7 billion increased $490.9 million, or 7.9%, from December 31, 2024. Loans outstanding at December 31, 2025 were $4.9 billion, increasing $408.3 million, or 9.1%, year over year. The increase in loans from prior year included a $220.6 million increase in the commercial loan portfolio, a $182.8 million increase in the residential loan portfolio, and a $12.2 million increase in the indirect loan portfolio, partially offset by a $7.3 million decrease in the consumer direct loan portfolio. CTBI’s investment portfolio increased $65.4 million, or 6.2%, from December 31, 2024. Deposits in other banks increased $4.3 million from December 31, 2024. Deposits, including repurchase agreements, at $5.7 billion increased $387.5 million, or 7.3%, from December 31, 2024. CTBI is not dependent on any one customer or group of customers for their source of deposits. As of December 31, 2025, two customers accounted for 3% each of our $5.4 billion in deposits. Only two customer relationships accounted for more than 1% each.
Previous wording
Shareholders’ equity at December 31, 2024 of $757.6 million was a $55.4 million, or 7.9%, increase from the $702.2 million at December 31, 2023. Net unrealized losses on securities, net of tax, were $98.4 million at December 31, 2024, compared to $103.3 million at December 31, 2023. Management has the ability and intent to hold these securities to recovery or maturity. CTBI’s annualized dividend yield to shareholders as of December 31, 2024 was 3.55%.
Current wording
Shareholders’ equity at December 31, 2025 of $856.1 million was a $98.5 million, or 13.0%, increase from the $757.6 million at December 31, 2024. Net unrealized losses on securities, net of tax, were $64.8 million at December 31, 2025, compared to $98.4 million at December 31, 2024. Management has the ability and intent to hold these securities to recovery or maturity. CTBI’s annualized dividend yield to shareholders as of December 31, 2025 was 3.75%.
Previous wording
CTBI’s total nonperforming loans were $26.7 million, or 0.59% of total loans, at December 31, 2024 compared to $14.0 million, or 0.34% of total loans, at December 31, 2023. Accruing loans 90+ days past due increased $0.4 million from December 31, 2023, while nonaccrual loans increased $12.3 million from December 31, 2023. Accruing loans 30-89 days past due at $16.8 million increased $1.5 million from December 31, 2023. 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, loan modifications for borrowers experiencing financial difficulty, nonaccrual status, and adequate loan loss reserves. The Loan Review Department has annually reviewed on average 97% 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 81% 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.
Current wording
Our total nonperforming loans were $19.2 million, or 0.39% of total loans, at December 31, 2025 compared to $26.7 million, or 0.59% of total loans, at December 31, 2024. Accruing loans 90+ days past due at $10.6 million increased $0.3 million from prior year end. Nonaccrual loans at $8.5 million decreased $7.8 million from prior year end. Accruing loans 30-89 days past due at $20.2 million increased $3.3 million from prior year end. 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, loan modifications for borrowers experiencing financial difficulty, nonaccrual status, and adequate loan loss reserves. The Loan Review Department has annually reviewed on average 97% 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 82% 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 consolidated financial statements contained herein.
Previous wording
Net loan charge-offs were $5.5 million, 0.13% of average loans, for the year ended December 31, 2024, compared to $3.2 million, 0.08% of average loans, for the year ended December 31, 2023.
Current wording
Net loan charge-offs were $7.4 million, 0.16% of average loans, for the year ended December 31, 2025, compared to $5.5 million, 0.13% of average loans, for the year ended December 31, 2024. Of the net charge-offs for the year, $3.0 million were in commercial loans, $0.2 million were in residential loans, $3.6 million were in consumer indirect loans, and $0.6 million were in consumer direct loans.
Previous wording
Our reserve coverage (allowance for credit losses to nonperforming loans) at December 31, 2024 was 206.0% compared to 354.7% at December 31, 2023. Nonaccrual loans to total loans at December 31, 2024 was 0.36% compared to 0.10% at December 31, 2023. Our allowance for credit losses to nonaccrual loans at December 31, 2024 was 335.8% compared to 1,223.9% at December 31, 2023. Our credit loss reserve as a percentage of total loans outstanding at December 31, 2024 was 1.23%, an increase from the 1.22% at December 31, 2023.
Current wording
Our reserve coverage (allowance for credit losses to nonperforming loans) at December 31, 2025 was 314.0% compared to 206.0% at December 31, 2024. Nonaccrual loans to totals loans were 0.2% at December 31, 2025 compared to 0.4% at December 31, 2024. The allowance for credit losses to nonaccrual loans at December 31, 2025 was 704.6% compared to 335.8% at December 31, 2024. Our credit loss reserve as a percentage of total loans outstanding at December 31, 2025 remained at 1.23% from December 31, 2024. See note 4 to our consolidated financial statements for additional information regarding our allowance for credit losses.
Previous wording
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 December 31, 2024, we had approximately $369.5 million in cash and cash equivalents and approximately $170.6 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 $271.4 million and $157.5 million at December 31, 2023. 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 December 31, 2024 and December 31, 2023. As of December 31, 2024, we had a $485.0 million available borrowing position with the Federal Home Loan Bank, compared to $476.2 million at December 31, 2023. 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 December 31, 2024 and December 31, 2023, we had $50 million in lines of credit with various correspondent banks available to meet any future cash needs. Our primary investing activities include purchases of securities and loan originations. We do not rely on any one source of liquidity and manage availability in response to changing consolidated balance sheet needs. Included in our cash and cash equivalents at December 31, 2024 were deposits with the Federal Reserve of $289.4 million, compared to $207.6 million at December 31, 2023. Additionally, we project cash flows from our investment portfolio to generate additional liquidity over the next 90 days.
Current wording
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 December 31, 2025, we had approximately $363.7 million in cash and cash equivalents and approximately $174.7 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 $369.5 million and $170.6 million, respectively, at December 31, 2024. 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 December 31, 2025 and December 31, 2024. As of December 31, 2025, we had a $546.9 million available borrowing position with the Federal Home Loan Bank, compared to $485.0 million at December 31, 2024. 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 December 31, 2025 and 2024, we had $50 million in lines of credit with various correspondent banks available to meet any future cash needs. Our primary investing activities include purchases of securities and loan originations. We do not rely on any one source of liquidity and manage availability in response to changing consolidated balance sheet needs. Included in our cash and cash equivalents at December 31, 2025 were deposits with the Federal Reserve of $288.1 million, compared to $289.4 million at December 31, 2024. Additionally, we project cash flows from our investment portfolio to generate additional liquidity over the next 90 days.
Previous wording
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 December 31, 2024, available-for-sale (“AFS”) securities comprised all of the total investment portfolio, and the AFS portfolio was approximately 139% of equity capital. Eighty-five percent of the pledge-eligible portfolio was pledged.
Current wording
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 December 31, 2025, available-for-sale (“AFS”) securities comprised 99.6% of the total investment portfolio, and the AFS portfolio was 131% of equity capital. Eighty-five percent of the pledge-eligible portfolio was pledged.
Previous wording
As of December 31, 2024, our outstanding balance on long-term debt was $64.0 million, which includes junior subordinated debentures of $57.8 million and loan related borrowings of $6.2 million. The interest payments on long-term debt due in one year or less is $3.7 million, and interest payments on long-term debt due in more than one year is $33.2 million. The interest on $57.8 million in junior subordinated debentures is calculated based on the three-month CME Term SOFR plus a tenor spread adjustment of 0.26161% plus 1.59% until its maturity of June 1, 2037. The three-month CME Term SOFR rate is projected using the most likely rate forecast from assumptions incorporated in the interest rate risk model and is determined two business days prior to the interest payment date. The interest on the $6.2 million in loan related borrowings is based on a fixed rate of 3.25%. Repayment of the liability will be provided by the loan payments made by the loan customer. This principal amount is also guaranteed by the United States Department of Agriculture (the “USDA”). Interest on long-term debt assumes the liability will not be prepaid and interest is calculated to maturity. These assumptions are uncertain, and as a result, the actual payments will differ from the projection due to changes in economic conditions. Refer to note 10 to the consolidated financial statements contained herein for additional information regarding long-term debt.
Current wording
As of December 31, 2025, our outstanding balance on long-term debt was $63.8 million, which includes junior subordinated debentures of $57.8 million and loan related borrowings of $6.0 million. The interest payments on long-term debt due in one year or less is $3.2 million, and interest payments on long-term debt due in more than one year is $29.9 million. The interest on $57.8 million in junior subordinated debentures is calculated based on the three-month Chicago Mercantile Exchange (“CME”) Term Secured Overnight Financing Rate (“SOFR”), plus a tenor spread adjustment of 0.26161% plus 1.59% until its maturity of June 1, 2037. The three-month CME Term SOFR rate is projected using the most likely rate forecast from assumptions incorporated in the interest rate risk model and is determined two business days prior to the interest payment date. The interest on the $6.0 million in loan related borrowings is based on a fixed rate of 3.25%. Repayment of the liability will be provided by the loan payments made by the loan customer. This principal amount is also guaranteed by the United States Department of Agriculture (the “USDA”). Interest on long-term debt assumes the liability will not be prepaid and interest is calculated to maturity. These assumptions are uncertain, and as a result, the actual payments will differ from the projection due to changes in economic conditions. Refer to note 9 to the consolidated financial statements contained herein for additional information regarding long-term debt.
Previous wording
As of December 31, 2024, our remaining contractual commitment for operating and finance leases due in one year or less was $1.9 million and operating leases due in more than one year was $19.7 million. Refer to note 15 to the consolidated financial statements contained herein for additional information regarding leases.
Current wording
As of December 31, 2025, our remaining contractual commitment for operating and finance leases due in one year or less was $2.2 million and operating leases due in more than one year was $22.4 million. Refer to note 7 to the consolidated financial statements contained herein for additional information regarding leases.
Previous wording
Commitments to extend credit and standby letters of credit do not necessarily represent future cash requirements in that these commitments often expire without being drawn upon. As of December 31, 2024, the commitments due in one year or less for other commitments was $671.8 million and commitments due in more than one year was $269.4 million. Refer to note 17 to the consolidated financial statements contained herein for additional information regarding other commitments.
Current wording
Commitments to extend credit and standby letters of credit do not necessarily represent future cash requirements in that these commitments often expire without being drawn upon. As of December 31, 2025, the commitments due in one year or less for other commitments was $742.3 million and commitments due in more than one year was $256.6 million. Refer to note 14 to the consolidated financial statements contained herein for additional information regarding other commitments.
Previous wording
Our purchase obligations consist of agreements to purchase goods and services entered into in the ordinary course of business. As of December 31, 2024, the value of our non-cancellable unconditional purchase obligations was $9.3 million.
Current wording
Our purchase obligations consist of agreements to purchase goods and services entered into in the ordinary course of business. As of December 31, 2025, the value of our non-cancellable unconditional purchase obligations was $15.3 million.
Previous wording
The simulation model used the yield curve spread evenly over a twelve-month period. The measurement at December 31, 2024 estimates that our net interest income in an up-rate environment would increase by 3.83% at a 400 basis point change, increase by 2.88% at a 300 basis point change, increase by 1.93% at a 200 basis point change, and increase by 0.98% at a 100 basis point change. In a down-rate environment, net interest income would decrease 1.34% at a 100 basis point change, decrease by 2.76% at a 200 basis point change, decrease by 4.07% at a 300 basis point change, and decrease by 5.32% at a 400 basis point change over one year. We actively manage our balance sheet and limit our exposure to long-term fixed rate financial instruments, including loans. In order to reduce the exposure to interest rate fluctuations and to manage liquidity, we have developed sale procedures for several types of interest-sensitive assets. Primarily all long-term, fixed rate single family residential mortgage loans underwritten according to Federal Home Loan Mortgage Corporation guidelines are sold for cash upon origination or originated under terms where they could be sold. Periodically, additional assets such as commercial loans are also sold. In 2024 and 2023, proceeds of $11.6 million and $15.2 million, respectively, were realized on the sale of fixed rate residential mortgages. We focus our efforts on consistent net interest revenue and net interest margin growth through each of the retail and wholesale business lines. We do not currently engage in trading activities.
Current wording
The simulation model used the yield curve spread evenly over a twelve-month period. The measurement at December 31, 2025 estimates that our net interest income in an up-rate environment would increase by 4.77% at a 400 basis point change, increase by 3.61% at a 300 basis point change, increase by 2.43% at a 200 basis point change, and increase by 1.22% at a 100 basis point change. In a down-rate environment, net interest income would decrease 1.30% at a 100 basis point change, decrease by 2.21% at a 200 basis point change, decrease by 2.85% at a 300 basis point change, and decrease by 3.45% at a 400 basis point change over one year. We actively manage our balance sheet and limit our exposure to long-term fixed rate financial instruments, including loans. In order to reduce the exposure to interest rate fluctuations and to manage liquidity, we have developed sale procedures for several types of interest-sensitive assets. Primarily all long-term, fixed rate single family residential mortgage loans underwritten according to Federal Home Loan Mortgage Corporation guidelines are sold for cash upon origination or originated under terms where they could be sold. Periodically, additional assets such as commercial loans are also sold. In 2025 and 2024, proceeds of $11.9 million and $11.6 million, respectively, were realized on the sale of fixed rate residential mortgages. We focus our efforts on consistent net interest revenue and net interest margin growth through each of the retail and wholesale business lines. We do not currently engage in trading activities.
Previous wording
We continue to grow our shareholders’ equity while also providing an annual dividend yield for the year 2024 of 3.55% to shareholders. Shareholders’ equity increased 7.9% from December 31, 2023 to $757.6 million at December 31, 2024. Our primary source of capital growth is the retention of earnings. Cash dividends were $1.86 per share for 2024 compared to $1.80 per share for 2023. We retained 59.7% of our earnings in 2023 compared to 58.7% in 2023.
Current wording
We continue to grow our shareholders’ equity while also providing an annual dividend yield for the year 2025 of 3.75% to shareholders. Shareholders’ equity increased 13.0% from December 31, 2024 to $856.1 million at December 31, 2025. Our primary source of capital growth is the retention of earnings. Cash dividends were $2.00 per share for 2025 compared to $1.86 per share for 2024. We retained 63.2% of our earnings in 2025 compared to 59.7% in 2024.
Previous wording
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. Management elected to use the CBLR framework for CTBI and CTB. CTBI’s CBLR ratio as of December 31, 2024 was 13.76%. CTB’s CBLR ratio as of December 31, 2024 was 13.29%.
Current wording
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. Management elected to use the CBLR framework for CTBI and CTB. CTBI’s CBLR ratio as of December 31, 2025 was 13.64%. CTB’s CBLR ratio as of December 31, 2025 was 13.19%.
Previous wording
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.
Current wording
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 estimates to be appropriate, and actual results have not differed materially from those determined using necessary estimates.
Previous wording
Our accounting policies are described in note 1 to the consolidated financial statements contained herein. We have identified the following critical accounting policies:
Current wording
Our accounting policies are described in note 1 to the consolidated financial statements contained herein. We have identified the following critical accounting estimates:
Previous wording
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 consolidated financial statements contained herein.
Current wording
Allowance for Credit Losses– 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 consolidated financial statements contained herein.
Previous wording
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.
Current wording
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.
Previous wording
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. CTBI uses a third party ACL software to calculate reserve estimates. Discounted cash flow (“DCF”) modeling was used 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 consolidated financial statements contained herein for information on CTBI’s risk rating system.
Current wording
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. CTBI uses a discounted cash flow (“DCF”) model 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 consolidated financial statements contained herein for information on CTBI’s risk rating system.
Previous wording
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.
Current wording
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 on an input basis. CTBI reverts to a long-run average of the modeled economic factors over four quarters to derive a long-run average probability of default/loss given default. 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.
Previous wording
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.
Current wording
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.
Previous wording
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.
Current wording
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.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
For further information regarding nonperforming loans, see note 4 to the consolidated financial statements contained herein.