COMMUNITY TRUST BANCORP INC /KY/

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, 2025 for further information in this regard.

Condensed Consolidated Balance Sheets

Condensed Consolidated Statements of Income and Comprehensive Income

Consolidated Statements of Changes in Shareholders’ Equity

Quarterly

Consolidated Statements of Changes in Shareholders’ Equity

Year-to-Date

Condensed Consolidated Statements of Cash Flows

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 a fair statement of the results for the interim periods presented. In accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information, these statements do not include certain information and footnote disclosures required by GAAP for complete annual financial statements. The results of operations, other comprehensive income (loss), the changes in shareholders’ equity, and the cash flows for the interim periods presented are not necessarily indicative of the results to be expected for the full year. The condensed consolidated balance sheet as of December 31, 2025 has been derived from the audited consolidated financial statements of CTBI for that period. For further information, refer to the consolidated financial statements and footnotes thereto for the year ended December 31, 2025, 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.

Use of Estimates

In preparing the consolidated financial statements, management must make certain estimates and assumptions. These estimates and assumptions affect the amounts reported for assets, liabilities, revenues, and expenses, as well as the disclosures provided. Future results could differ from the current estimates. Such estimates include, but are not limited to, the allowance for credit losses (“ACL”), goodwill, and the valuation of financial instruments. The accompanying financial statements have been prepared using values and information currently available to CTBI. Given the volatility of current economic conditions, the values of assets and liabilities recorded in the financial statements could change rapidly, resulting in material future adjustments in asset values, the ACL, and capital.

Emerging GAAP

Recently Issued Accounting Guidance, Not Yet Adopted as of June 30, 2026

Note 2 – Securities

The amortized cost and fair value of debt securities available-for-sale are summarized as follows:

The amounts reported in the preceding tables exclude accrued interest on securities of $4.3 million and $4.5 million at June 30, 2026 and December 31, 2025, respectively, which is presented as a component of accrued interest receivable in the consolidated balance sheets.

The amortized cost and fair value of debt securities at June 30, 2026 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.

During the three months ended June 30, 2026, we had a net securities gain of $924 thousand, consisting of a pre-tax gain of $12 thousand on sales and calls of AFS securities and an unrealized gain of $912 thousand from the fair value adjustment of equity securities. During the three months ended June 30, 2025, we had a net securities gain of $150 thousand, consisting of a pre-tax gain of $1 thousand on calls of AFS securities and an unrealized gain of $149 thousand from the fair value adjustment of equity securities. During the six months ended June 30, 2026, we had a net securities gain of $436 thousand, consisting of a pre-tax gain of $12 thousand realized on sales and calls of AFS securities and an unrealized gain of $424 thousand from the fair value adjustment of equity securities. During the six months ended June 30, 2025, we had a net securities gain of $630 thousand, consisting of a pre-tax gain of $1 thousand realized on calls of AFS securities and an unrealized gain of $629 thousand from the fair value adjustment of equity securities.

The amortized cost of securities pledged as collateral, to secure public deposits and for other purposes, was $591.5 million and $602.6 million at June 30, 2026 and December 31, 2025, respectively.

The fair value of securities pledged was $541.7 million and $556.9 million at June 30, 2026 and December 31, 2025, respectively.

The amortized cost of securities sold under agreements to repurchase amounted to $400.2 million and $386.8 million at June 30, 2026 and December 31, 2025, respectively. The fair value of securities pledged was $368.1 million and $358.1 million at June 30, 2026 and December 31, 2025, respectively.

CTBI evaluates its investment portfolio on a quarterly basis for impairment. The analysis performed as of June 30, 2026 and December 31, 2025 indicates that all impairment is market and interest rate driven and not credit-related. The percentage of total debt securities with unrealized losses as of June 30, 2026 was 93.8% compared to 85.4% as of December 31, 2025. The following tables provide the amortized cost, gross unrealized losses, and fair value of debt securities available-for-sale, aggregated by investment category and length of time the individual securities have been in a continuous unrealized loss position as of the periods indicated that are not deemed to have credit losses.

Equity Securities at Fair Value

Equity securities at fair value as of June 30, 2026 were $4.6 million, as a result of a $912 thousand increase in the fair value during the quarter. Equity securities at fair value as of December 31, 2025 were $4.2 million, as a result of a $373 thousand increase in the fair value in 2025. No equity securities were sold during 2025 or the first six months of 2026.

Note 3 – 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:

Unearned fees included above totaled $419 thousand and $359 thousand as of June 30, 2026 and December 31, 2025, respectively, while the unamortized premiums on the indirect lending portfolio totaled $36.9 million and $34.5 million as of June 30, 2026 and December 31, 2025, respectively.

Loans identified to be sold into the secondary market are classified as held for sale and are not included in the loans balances above. Loans held for sale are recorded at lower of cost or fair value. There wereno loans held for sale at June 30, 2026 compared to $0.2 million at December 31, 2025.

Accrued interest receivable from loans, which is excluded from loan balances, was $21.3 million and $19.7 million at June 30, 2026 and December 31, 2025, respectively.

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.

Allowance for Credit Losses

The balance in the allowance for credit losses increased during the quarter, primarily as a result of the change in loan volume with significant increases in the commercial, residential, and consumer indirect loan portfolios. The following tables present the activity in the ACL for loans for the periods indicated.

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 provision expense. The total unfunded commitment off-balance sheet credit exposure is presented below.

Nonperforming loans

Nonaccrual loans and loans 90 days past due and still accruing, segregated by loan segment, were as follows:

Interest income recognized on nonaccrual loans for the three and six months ended June 30, 2026 and for the year ended December 31, 2025 totaled $137.8 thousand, $142.2 thousand, and $66.2 thousand, respectively.

The following tables present CTBI’s loan portfolio aging analysis, segregated by loan segment (including loans 90 days past due and still accruing):

Credit Quality Indicators and Profile

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:

The following tables present the credit risk profile of CTBI’s commercial loan portfolio based on rating category and payment activity, segregated by loan segment and based on last credit decision or year of origination:

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 loan segment:

The total of consumer mortgage loans secured by real estate properties for which formal foreclosure proceedings are in process was $3.5 million and $3.1 million at June 30, 2026 and December 31, 2025, respectively.

Individually Evaluated Loans

If a loan does not share risk characteristics with other pooled loans in determining the ACL, the loan is 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:

Based on the quarterly evaluation of losses for these credits, the combined amount of expected loss at June 30, 2026 is $0.5 million. This expected loss is tied totwo unrelated loans that demonstrate a shortfall in collateral which is insufficient to repay the principal balance of the loans in the event of a liquidation of the collateral and after estimated selling costs. All other evaluated credits show sufficient collateral to repay the entire loan balances after estimated selling costs. The hotel/motel, commercial real estate residential, and commercial real estate nonresidential segments are all collateralized with real estate. Thefour loans listed in the commercial other segment at June 30, 2026 are collateralized by inventory, equipment, and accounts receivable. One evaluated credit is an ACH commitment that is unsecured, but it has no balance outstanding.

Loan Modifications

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.

These loans, segregated by loan segment and concession granted, are presented below for the quarter ended June 30, 2026:

The following tables describe the financial effect of the modifications made to borrowers experiencing financial difficulty for the quarter ended June 30, 2026:

These loans, segregated by loan segment and concession granted, are presented below for the six months ended June 30, 2026:

The following tables describe the financial effect of the modifications made to borrowers experiencing financial difficulty for the six months ended June 30, 2026:

These loans, segregated by loan segment and concession granted, are presented below for the quarter ended June 30, 2025:

The following tables describe the financial effect of the modifications made to borrowers experiencing financial difficulty for the quarter ended June 30, 2025:

These loans, segregated by loan segment and concession granted, are presented below for the six months ended June 30, 2025:

The following tables describe the financial effect of the modifications made to borrowers experiencing financial difficulty for the six months ended June 30, 2025:

No charge-offs have resulted from the presented modifications. We had commitments to extend additional credit in the amount of $3 thousand at June 30, 2026, andno commitments to extend additional credit at June 30, 2025, on loans that were considered in financial difficulty.

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 loans to borrowers experiencing financial difficulty for the past 12 months as of June 30, 2026.

The allowance for credit 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, 2026, there were 7 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. Presented below, segregated by segment, are loans to borrowers experiencing financial difficulty for which there was a payment default during the periods indicated and such default was within 12 months of the loan modification.

Note 4 – Repurchase Agreements

Repurchase agreements are accounted for as secured borrowings. The following table presents information regarding the balances of our repurchase agreement borrowings as of and for the periods indicated:

At June 30, 2026 and December 31, 2025, we had amounts at risk under repurchase agreements forone customer exceeding 10% of shareholders’ equity with a balance of $148.0 million at each period end and weighted average maturities of 5.0 months and 4.6 months, respectively.

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 $368.1 million and $358.1 million at June 30, 2026 and December 31, 2025, 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 is presented in the following tables:

Repurchase agreements are subject to underlying agreements with master netting or similar arrangements, which provide for the right of setoff in the event of default or in the event of bankruptcy of either party to the transactions. Repurchase agreements are reported to these arrangements on a gross basis. The following table presents information regarding repurchase agreements as if it was presented on a net basis.

Amounts disclosed for collateral received or posted include cash and securities up to and not exceeding the net amount of the repurchase agreement liability presented in the balance sheet. The fair value of the total collateral may exceed the amounts presented. Refer to Note 2 above for the total fair value of financial instruments pledged as collateral for repurchase agreements.

Note 5 – Fair Value of Financial Assets and Liabilities

Fair Value Measurements

Fair value is defined as the price that would be received upon sale of an asset or the price paid to transfer a liability, in an orderly transaction between market participants at the measurement date (i.e., the “exit price”). CTBI uses a fair value hierarchy that prioritizes the inputs used in valuation techniques to measure fair value into three broad levels. The following is a brief description of each level:

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.

A financial instrument’s categorization within the above valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. CTBI’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and CTBI considers factors specific to the assets or liabilities. The following is a description of the valuation methodologies used for CTBI’s assets and liabilities measured at fair value on a recurring basis.

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 and indicate the level within the fair value hierarchy of the valuation techniques.

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 hadno liabilities measured and recorded at fair value as of June 30, 2026 and December 31, 2025. There have been no significant changes in the valuation techniques during the six months ended June 30, 2026 or the year ended December 31, 2025. For assets classified within Level 3 of the fair value hierarchy, the process used to develop the reported fair value is described below.

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 magnifyor mitigate the effect of changes in the unobservable inputs on the fair value measurement.

If quoted market prices are not available, 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, agency mortgage-backed securities, and asset-backed securities are classified as Level 2 inputs.

Fair value for equity securities is derived based on unobservable inputs, such as the discount rate, quarterly dividends payable to the Visa Class B-3 and Class C common stock, and the prevailing conversion rate at the conversion date. The most recent conversion rate for Class B-3 common stock of 1.4953 and the most recent dividend rate of 1.0019 were used to derive the fair value estimate for Class B-3. The most recent conversion rate for Class C common stock of 4.0000 and the most recent dividend rate of 2.68 were used to derive the fair value estimate for Class C. 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. The weighted averages presented in the tables below are determined by taking the median of the estimates in conversion dates and discount rate.

In determining fair value, CTBI utilizes 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, mortgage servicing rights (“MSRs”) are classified within Level 3 of the hierarchy. 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.

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.

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:

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

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 and indicate the level within the fair value hierarchy of the valuation techniques.

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.

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. 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. Fair value adjustment to collateral-dependent loans during the three and six months ended June 30, 2026 reflected an improvement of $0.2 million with the additional collateral of the fair valued loan. Fair value adjustments for the year ended December 31, 2025 were $0.4 million.

Other Real Estate Owned

Estimated fair value of other real estate owned (“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 to OREO disclosed above for the three and six months ended June 30, 2026 were $15 thousand. Fair value adjustments to OREO disclosed above for the year ended December 31, 2025 were $38 thousand.

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

Unobservable inputs for mortgage servicing rights were weighted by loan amount. Unobservable inputs for equity securities were weighted by security value. Unobservable inputs for OREO were weighted by estimated cost to sell. There were no transfers in or out of Level 3 during the six months ended June 30, 2026. The following tables present quantitative information about unobservable inputs used in recurring and nonrecurring Level 3 fair value measurements for the periods indicated.

Fair Value of Financial Instruments

The following tables present estimated fair value of CTBI’s financial instruments and indicate the level within the fair value hierarchy of the valuation techniques.

Note 6 – Stock-Based Compensation

There wereno stock option awards outstanding andno unrecognized expense related to stock option grants as of June 30, 2026. Restricted stock expense for the three and six months ended June 30, 2026 was $475 thousand and $978 thousand, respectively, including $52 thousand and $105 thousand, respectively, in dividends paid during those periods. As of June 30, 2026, 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 3.0 years.

The following table shows restricted stock activity for the periods indicated.

The restricted stock awards granted during 2026 were issued pursuant to the terms of CTBI’s 2025 Stock Ownership Incentive Plan. The restrictions on these shares of restricted stock will lapse ratably over four years, subject to such employee’s continued employment, except for 5,000 shares granted in March 2026 pursuant to a management retention restricted stock award which will cliff vest at the end offive years. 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. CTBI recognizes forfeitures when they occur.

Note 7 – Earnings Per Share

The following table sets forth the computation of basic and diluted earnings per share.

There wereno options to purchase common shares that were excluded from the diluted calculations above for the three and six months ended June 30, 2026 and 2025. Unvested restricted stock grants were used in the calculation of diluted earnings per share based on the treasury method.

Note 8 – Accumulated Other Comprehensive Income (Loss)

The following table shows the reconciliation of accumulated other comprehensive income (loss) (“AOCI”) and amounts reclassified to earnings during the periods indicated.

Note 9 – Segment Reporting

The following tables present the reconciliations of reportable segment revenues and measures of profit or loss and line item reconciliation to CTBI’s consolidated financial statement totals for the periods indicated.

The following tables present other segment disclosures:

Below is a reconciliation of our reportable segment assets to CTBI’s consolidated total assets: