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What changed in COMMUNITY TRUST BANCORP INC /KY/'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of COMMUNITY TRUST BANCORP INC /KY/'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+161 added−183 removedSource: 10-K (2025-02-28) vs 10-K (2024-02-28)

Top changes in COMMUNITY TRUST BANCORP INC /KY/'s 2024 10-K

161 paragraphs added · 183 removed · 139 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeThe 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. In April 2020, as directed by Section 4012 of the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”), the regulatory agencies introduced temporary changes to the CBLR.
Biggest changeThe 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. Management elected to use the CBLR framework for CTBI and CTB. CTBI’s CBLR ratio as of December 31, 2024 was 13.76%.
Such legislation and policies include statutory maximum rates on some loans, reserve requirements, domestic monetary and fiscal policy, and limitations on the kinds of services that may be offered. 3 Table of Contents CTBI’s annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and all amendments to those reports are available free of charge on our website at www.ctbi.com as soon as reasonably practicable after such materials are electronically filed with or furnished to the Securities and Exchange Commission.
Such legislation and policies include statutory maximum rates on some loans, reserve requirements, domestic monetary and fiscal policy, and limitations on the kinds of services that may be offered. 3 Table of Contents CTBI’s annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and all amendments to those reports are available free of charge on our website at www.ctbi.com as soon as reasonably practicable after such materials are electronically filed with or furnished to the Securities and Exchange Commission (“SEC”).
Our employees recognize the long-term benefit of working with our organization as evidenced by the 20% of our employees who have more than 20 years of service. Our employees participate in numerous coaching, training, and educational programs, including required periodic training on topics such as ethics, privacy regulations, anti-money laundering, and UDAAP (Unfair, Deceptive, or Abusive Acts or Practices).
Our employees recognize the long-term benefit of working with our organization as evidenced by the 21% of our employees who have more than 20 years of service. Our employees participate in numerous coaching, training, and educational programs, including required periodic training on topics such as ethics, privacy regulations, anti-money laundering, and UDAAP (Unfair, Deceptive, or Abusive Acts or Practices).
CTBI’s Code of Business Conduct and Ethics and other corporate governance documents are also available on our website. Copies of our annual report will be made available free of charge upon written request to: Community Trust Bancorp, Inc. Mark A. Gooch Vice Chairman, President, and CEO P.O.
CTBI’s Code of Business Conduct and Ethics and other corporate governance documents are also available on our website. Copies of our annual report will be made available free of charge upon written request to: Community Trust Bancorp, Inc. Mark A. Gooch Chairman, President, and CEO P.O.
Our employees served over 1,500 hours throughout the year with organizations that provide affordable housing and other services to low and moderate income families and encourage economic development for small businesses and farms. COMPETITION CTBI’s subsidiaries face substantial competition for deposit, credit, trust, wealth management, and brokerage relationships in the communities we serve.
Our employees served over 1,000 hours throughout the year with organizations that provide affordable housing and other services to low and moderate income families and encourage economic development for small businesses and farms. COMPETITION CTBI’s subsidiaries face substantial competition for deposit, credit, trust, wealth management, and brokerage relationships in the communities we serve.
At the time of this filing, our Board of Directors is 25% female. CTBI offers our employees competitive compensation, as well as a highly competitive benefits package. A retirement plan, an employee stock ownership plan, group life insurance, major medical insurance, a cafeteria plan, education reimbursement, and management and employee incentive compensation plans are available to all eligible personnel.
At the time of this filing, our Board of Directors is 30% female. CTBI offers our employees competitive compensation, as well as a highly competitive benefits package. A retirement plan, an employee stock ownership plan, group life insurance, major medical insurance, a cafeteria plan, education reimbursement, and management and employee incentive compensation plans are available to all eligible personnel.
Box 2947 Pikeville, KY 41502-2947 The Securities and Exchange Commission (“SEC”) maintains an internet site ( http://www.sec.gov ) that contains reports, proxy and information statements, and other information regarding CTBI and other issuers that file electronically with the SEC. Capital Requirements Insured depository institutions are required to meet certain capital level requirements.
Box 2947 Pikeville, KY 41502-2947 The SEC maintains an internet site ( http://www.sec.gov ) that contains reports, proxy and information statements, and other information regarding CTBI and other issuers that file electronically with the SEC. Capital Requirements Insured depository institutions are required to meet certain capital level requirements.
CTB’s community development lending totaled over $43 million for the year 2023. Also, during 2023, CTBI made contributions totaling over $807 thousand to aid low and moderate income families and communities and encourage economic development.
CTB’s community development lending totaled over $38 million for the year 2024. Also, during 2024, CTBI made contributions totaling over $450 thousand to aid low and moderate income families and communities and encourage economic development.
The commercial bank is Community Trust Bank, Inc., Pikeville, Kentucky (“CTB”) and the trust company is Community Trust and Investment Company, Lexington, Kentucky (“CTIC”). At December 31, 2023, CTBI had total consolidated assets of $5.8 billion and total consolidated deposits, including repurchase agreements, of $4.9 billion. Total shareholders’ equity at December 31, 2023 was $702.2 million.
The commercial bank is Community Trust Bank, Inc., Pikeville, Kentucky (“CTB”) and the trust company is Community Trust and Investment Company, Lexington, Kentucky (“CTIC”). At December 31, 2024, CTBI 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.
These are funded through our Educational Assistance Program. As of December 31, 2023, CTBI and our subsidiaries had 967 full-time equivalent employees. Females comprise 76% of our workforce, and 60% of our managerial positions (supervisor or above) are held by females. This includes 65% of our branch managers, 29% of our market presidents, and 32% of our senior vice presidents.
These are funded through our Educational Assistance Program. As of December 31, 2024, CTBI and our subsidiaries had 934 full-time equivalent employees. Females comprise 75% of our workforce, and 60% of our managerial positions (supervisor or above) are held by females. This includes 66% of our branch managers, 27% of our market presidents, and 33% of our senior vice presidents.
Trust assets under management at December 31, 2023 were $3.4 billion, including CTB’s investment portfolio totaling $1.2 billion.
Trust assets under management at December 31, 2024 were $3.7 billion, including CTB’s investment portfolio totaling $1.1 billion.
CTBI’s CBLR ratio as of December 31, 2023 was 13.69%. CTB’s CBLR ratio as of December 31, 2023 was 13.22%.
CTB’s CBLR ratio as of December 31, 2024 was 13.29%.
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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.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeDespite our efforts and those of our third party service providers to ensure the integrity of these systems, it is possible that we or our third party service providers may not be able to anticipate or to implement effective preventive measures against all security breaches of these types, especially because techniques used change frequently or are not recognized until launched, and because security attacks can originate from a wide variety of sources. 10 Table of Contents A successful breach of the security of our systems or those of our third party service providers could cause serious negative consequences to us, including significant disruption of our operations, misappropriation of our confidential information or the confidential information of our customers, or damage to our computers or operating systems, and could result in violations of applicable privacy and other laws, financial loss to us or to our customers, loss in confidence in our security measures, customer dissatisfaction, litigation exposure, and harm to our reputation, all of which could have a material adverse effect on us.
Biggest changeA successful breach of the security of our systems or those of our third party service providers could cause serious negative consequences to us, including significant disruption of our operations, misappropriation of our confidential information or the confidential information of our customers, or damage to our computers or operating systems, and could result in violations of applicable privacy and other laws, financial loss to us or to our customers, loss in confidence in our security measures, customer dissatisfaction, litigation exposure, and harm to our reputation, all of which could have a material adverse effect on us.
Although we have policies and procedures to perform an environmental review before initiating any foreclosure action on real property, these reviews may not be sufficient to detect all potential environmental hazards. The remediation costs and any other financial liabilities associated with an environmental hazard could have a material adverse effect on our financial condition and results of operations. Item1B.
Although we have policies and procedures to perform an environmental review before initiating any foreclosure action on real property, these reviews may not be sufficient to detect all potential environmental hazards. The remediation costs and any other financial liabilities associated with an environmental hazard could have a material adverse effect on our financial condition and results of operations.
The extent to which a widespread health crisis may impact our business, results of operations, and financial condition, as well as its regulatory capital and liquidity ratios, will depend on future developments, which are highly uncertain and are difficult to predict, including, but not limited to, the duration and severity of the crisis, the potential for seasonal or other resurgences, actions taken by governmental authorities and other third parties to contain and treat such an epidemic, a pandemic or another infections disease outbreak, and how quickly and to what extent normal economic and operating conditions can resume.
The extent to which a widespread health crisis may impact our business, results of operations, and financial condition, as well as its regulatory capital and liquidity ratios, will depend on future developments, which are highly uncertain and are difficult to predict, including, but not limited to, the duration and severity of the crisis, the potential for seasonal or other resurgences, actions taken by governmental authorities and other third parties to contain and treat such an epidemic, a pandemic, or another infectious disease outbreak, and how quickly and to what extent normal economic and operating conditions can resume.
A failure to maintain adequate liquidity could have a material adverse effect on our financial condition and results of operations. Adverse developments affecting the financial services industry, such as recent bank failures or concerns involving liquidity, may have a material effect on our operations.
A failure to maintain adequate liquidity could have a material adverse effect on our financial condition and results of operations. Adverse developments affecting the financial services industry, such as bank failures or concerns involving liquidity, may have a material effect on our operations.
As of December 31, 2023, hotel/motel loans comprised approximately 10% of our total loan portfolio. • Other Commercial Loans . Repayment is generally dependent upon the successful operation of the borrower’s business. In addition, the collateral securing the loans may depreciate over time, be difficult to appraise, be illiquid, or fluctuate in value based on the success of the business.
As of December 31, 2024, hotel/motel loans comprised approximately 10% of our total loan portfolio. • Other Commercial Loans . Repayment is generally dependent upon the successful operation of the borrower’s business. In addition, the collateral securing the loans may depreciate over time, be difficult to appraise, be illiquid, or fluctuate in value based on the success of the business.
As of December 31, 2023, commercial real estate nonresidential loans comprised approximately 19% of our total loan portfolio. • Hotel/Motel . The hotel and motel industry is highly susceptible to changes in the domestic and global economic environments, which has caused the industry to experience substantial volatility due to the recent global pandemic.
As of December 31, 2024, commercial real estate nonresidential loans comprised approximately 19% of our total loan portfolio. • Hotel/Motel . The hotel and motel industry is highly susceptible to changes in the domestic and global economic environments, which has caused the industry to experience substantial volatility due to the recent global pandemic.
Changes in market interest rates will also affect the level of voluntary prepayments on our loans and the receipt of payments on our mortgage-backed securities resulting in the receipt of proceeds that may be reinvested at a lower rate than the loan or mortgage-backed security being prepaid. 6 Table of Contents We originate residential loans for sale and for our portfolio.
Changes in market interest rates will also affect the level of voluntary prepayments on our loans and the receipt of payments on our mortgage-backed securities resulting in the receipt of proceeds that may be reinvested at a lower rate than the loan or mortgage-backed security being prepaid. We originate residential loans for sale and for our portfolio.
We also assume the risk that the dealership administering the lending process does not comply with applicable consumer protection law and regulations. A significant part of our lending business is focused on small to medium-sized business which may be impacted more severely during periods of economic weakness.
We also assume the risk that the dealership administering the lending process does not comply with applicable consumer protection law and regulations. 7 Table of Contents A significant part of our lending business is focused on small to medium-sized business which may be impacted more severely during periods of economic weakness.
There is no assurance that any such losses would not materially and adversely affect our businesses, financial condition, or results of operations. Acquisition Risks Acquisition Risk We may have difficulty in the future continuing to grow through acquisitions.
There is no assurance that any such losses would not materially and adversely affect our businesses, financial condition, or results of operations. 11 Table of Contents Acquisition Risks Acquisition Risk We may have difficulty in the future continuing to grow through acquisitions.
Such conditions could adversely affect the credit quality of our loans and our business, financial condition, and results of operations. Economy of Our Markets Our business may continue to be adversely affected by ongoing weaknesses in the local economies on which we depend.
Such conditions could adversely affect the credit quality of our loans and our business, financial condition, and results of operations. 4 Table of Contents Economy of Our Markets Our business may continue to be adversely affected by ongoing weaknesses in the local economies on which we depend.
Our ability to engage in routine funding transactions could be adversely affected by the actions and commercial soundness of other financial institutions. Financial services companies are interrelated as a result of trading, clearing, counterparty, or other relationships.
Counterparty Risk The soundness of other financial institutions could adversely affect CTBI. Our ability to engage in routine funding transactions could be adversely affected by the actions and commercial soundness of other financial institutions. Financial services companies are interrelated as a result of trading, clearing, counterparty, or other relationships.
An economic slow-down, or the reversal of the economic recovery, in the regions in which we conduct our business could result in declines in loan demand and collateral values. Furthermore, negative impacts on our customers caused by such a health crisis, including the resurgence of COVID-19, could result in increased risk of delinquencies, defaults, foreclosures, and losses on our loans.
An economic slow-down, or the reversal of an economic recovery, in the regions in which we conduct our business could result in declines in loan demand and collateral values. Furthermore, negative impacts on our customers caused by such a health crisis could result in increased risk of delinquencies, defaults, foreclosures, and losses on our loans.
Moreover, the effects of a widespread health crisis may heighten many of the other risks described in this “Risk Factors” section. As a result, the negative effects on our business, results of operations, and financial condition from an epidemic, a pandemic, or another infectious disease outbreak, including the resurgence of the COVID-19 pandemic, could be material.
Moreover, the effects of a widespread health crisis may heighten many of the other risks described in this “Risk Factors” section. As a result, the negative effects on our business, results of operations, and financial condition from an epidemic, a pandemic, or another infectious disease outbreak could be material.
As of December 31, 2023, commercial real estate residential loans comprised approximately 10% of our total loan portfolio. • Commercial Real Estate Nonresidential . Repayment is dependent on income being generated in amounts sufficient to cover operating expenses and debt service.
As of December 31, 2024, commercial real estate residential loans comprised approximately 11% of our total loan portfolio. • Commercial Real Estate Nonresidential . Repayment is dependent on income being generated in amounts sufficient to cover operating expenses and debt service.
The bank failures in March 2023 highlight the potential results of an insured depository institution unexpectedly having to obtain needed liquidity to satisfy deposit withdrawal requests, including how quickly such requests can accelerate once uninsured depositors lose confidence in an institutions ability to satisfy its obligations to depositors.
Bank failures that occurred in 2023 highlighted the potential results of an insured depository institution unexpectedly having to obtain needed liquidity to satisfy deposit withdrawal requests, including how quickly such requests can accelerate once uninsured depositors lose confidence in an institutions ability to satisfy its obligations to depositors.
As of December 31, 2023, other commercial loans comprised approximately 10% of our total loan portfolio. 7 Table of Contents Consumer loans may carry a higher degree of repayment risk than residential mortgage loans, particularly when the consumer loan is unsecured.
As of December 31, 2024, other commercial loans comprised approximately 10% of our total loan portfolio. Consumer loans may carry a higher degree of repayment risk than residential mortgage loans, particularly when the consumer loan is unsecured.
While we have policies and procedures designed to prevent or limit the effect of the possible security breach of our information systems, if unauthorized persons were somehow to get access to confidential or proprietary information in our possession or to our proprietary information, it could result in litigation and regulatory investigations, significant legal and financial exposure, damage to our reputation, or a loss of confidence in the security of our systems that could materially adversely affect our results of operation. 11 Table of Contents Counterparty Risk The soundness of other financial institutions could adversely affect CTBI.
While we have policies and procedures designed to prevent or limit the effect of the possible security breach of our information systems, if unauthorized persons were somehow to get access to confidential or proprietary information in our possession or to our proprietary information, it could result in litigation and regulatory investigations, significant legal and financial exposure, damage to our reputation, or a loss of confidence in the security of our systems that could materially adversely affect our results of operation.
We, like all businesses, as well as our market areas, borrowers, and customers, may be adversely impacted to the extent that weather-related events cause damage or disruption to properties or businesses. 5 Table of Contents Risk from COVID-19 and Other Infectious Disease Outbreaks Generally Our business, results of operations and financial condition may be adversely affected by epidemics and pandemics, such as the COVID-19 outbreak, or other infectious disease outbreaks.
We, like all businesses, as well as our market areas, borrowers, and customers, may be adversely impacted to the extent that weather-related events cause damage or disruption to properties or businesses. Risk from Infectious Disease Outbreaks Our business, results of operations, and financial condition may be adversely affected by epidemics, pandemics, or other infectious disease outbreaks.
This business requires us to take “credit risk,” which is the risk of losing principal and interest income because borrowers fail to repay loans.
Originating and underwriting loans are integral to the success of our business. This business requires us to take “credit risk,” which is the risk of losing principal and interest income because borrowers fail to repay loans.
Any such financial liability or reputational damage could have an adverse effect on our business, financial condition, and results of operations. 9 Table of Contents Significant legal actions could subject us to uninsured liabilities. From time to time, we may be subject to claims related to our operations.
Any such financial liability or reputational damage could have an adverse effect on our business, financial condition, and results of operations. Significant legal actions could subject us to uninsured liabilities. From time to time, we may be subject to claims related to our operations. These claims and legal actions, including supervisory actions by our regulators, could involve significant amounts.
These claims and legal actions, including supervisory actions by our regulators, could involve significant amounts. We maintain insurance coverage in amounts and with deductibles we believe are appropriate for our operations. However, our insurance coverage may not cover all claims against us and related costs, and further insurance coverage may not continue to be available at a reasonable cost.
We maintain insurance coverage in amounts and with deductibles we believe are appropriate for our operations. However, our insurance coverage may not cover all claims against us and related costs, and further insurance coverage may not continue to be available at a reasonable cost.
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. Credit Risk Our earnings and reputation may be adversely affected if we fail to effectively manage our credit risk. Originating and underwriting loans are integral to the success of our business.
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. 6 Table of Contents Credit Risk Our earnings and reputation may be adversely affected if we fail to effectively manage our credit risk.
The type of institutions we compete with include commercial banks, savings institutions, mortgage banking firms, credit unions, finance companies, mutual funds, insurance companies, and brokerage and investment banking firms. Competition arises from institutions located within and outside our market areas.
We compete for clients by offering excellent service and competitive rates on our loans and deposit products. The type of institutions we compete with include commercial banks, savings institutions, mortgage banking firms, credit unions, finance companies, mutual funds, insurance companies, and brokerage and investment banking firms. Competition arises from institutions located within and outside our market areas.
Operational Risk An extended disruption of vital infrastructure or a security breach could negatively impact our business, results of operations, and financial condition. Our operations depend upon, among other things, our infrastructure, including equipment and facilities.
The related revenue reduction could adversely affect our financial condition, cash flows, and results of operations. 8 Table of Contents Operational Risk An extended disruption of vital infrastructure or a security breach could negatively impact our business, results of operations, and financial condition. Our operations depend upon, among other things, our infrastructure, including equipment and facilities.
As of December 31, 2023, approximately 66% of our loan portfolio was secured by real estate, with approximately 39% of the portfolio consisting of commercial real estate.
As of December 31, 2024, approximately 68% of our loan portfolio was secured by real estate, with approximately 41% of the portfolio consisting of commercial real estate (“CRE”).
CTBI’s access to funding sources in amounts adequate to finance our activities or on terms that are acceptable to us could be impaired by factors that affect us specifically or the financial services industry or economy in general.
CTBI requires liquidity to meet our deposit and debt obligations as they come due and to fund loan demands. CTBI’s access to funding sources in amounts adequate to finance our activities or on terms that are acceptable to us could be impaired by factors that affect us specifically or the financial services industry or economy in general.
As of December 31, 2023, consumer loans comprised approximately 24% of our total loan portfolio. As of December 31, 2023, approximately 84% of our consumer loans and 20% of our total loan portfolio were consumer indirect loans.
As of December 31, 2024, consumer loans comprised approximately 22% of our total loan portfolio. As of December 31, 2024, approximately 85% of our consumer loans and 19% of our total loan portfolio were consumer indirect loans.
The resurgence of the COVID-19 pandemic, or a new epidemic, pandemic or infectious disease outbreak, may result in us having to close certain offices and may require us to limit how customers conduct business through our branch network.
Epidemics, pandemics, or infectious disease outbreaks, may result in us having to close certain offices and may require us to limit how customers conduct business through our branch network.
See also, “Cautionary Statement Regarding Forward-Looking Statements.” If any of the following risks actually occur, our financial condition and results of operations could be materially and adversely affected.
See also, “Cautionary Statement Regarding Forward-Looking Statements.” If any of the following risks actually occur, our financial condition and results of operations could be materially and adversely affected. If this were to happen, the value of our common stock could decline significantly, and you could lose all or part of your investment.
In addition, to stay competitive in our markets we may need to adjust the interest rates on our products to match the rates offered by our competitors, which could adversely affect our net interest margin.
In addition, to stay competitive in our markets we may need to adjust the interest rates on our products to match the rates offered by our competitors, which could adversely affect our net interest margin. As a result, our profitability depends upon our continued ability to successfully compete in our market areas while achieving our investment objectives.
General market price declines or market volatility in the future could adversely affect the price of our common stock, and the current market price may not be indicative of future market prices. Liquidity Risk CTBI is subject to liquidity risk. CTBI requires liquidity to meet our deposit and debt obligations as they come due and to fund loan demands.
Our stock price may fluctuate significantly in the future, and these fluctuations may be unrelated to CTBI’s performance. General market price declines or market volatility in the future could adversely affect the price of our common stock, and the current market price may not be indicative of future market prices. Liquidity Risk CTBI is subject to liquidity risk.
Banking customers and employees have been, and will likely continue to be, targeted by parties using fraudulent e-mails and other communications in attempts to misappropriate passwords, account information, or other personal information, or to introduce viruses or other malware to bank information systems or customers’ computers.
The incident did not impact the ongoing operations of CTBI, and we do not expect any significant expenses beyond what our insurance policy covers. 10 Table of Contents Banking customers and employees have been, and will likely continue to be, targeted by parties using fraudulent e-mails and other communications in attempts to misappropriate passwords, account information, or other personal information, or to introduce viruses or other malware to bank information systems or customers’ computers.
Failure to successfully keep pace with technological change affecting the financial services industry could have a material adverse impact on our business and, in turn, our financial condition and results of operations.
Failure to successfully keep pace with technological change affecting the financial services industry could have a material adverse impact on our business and, in turn, our financial condition and results of operations. 9 Table of Contents Cyber Risk A breach in the security of our systems could disrupt our business, result in the disclosure of confidential information, damage our reputation, and create significant financial and legal exposure for us.
Furthermore, our business operations may be disrupted due to vendors and third-party service providers being unable to work or provide services effectively during such a health crisis, including because of illness, quarantines, or other government actions.
Furthermore, our business operations may be disrupted due to vendors and third-party service providers being unable to work or provide services effectively during such a health crisis, including because of illness, quarantines, or other government actions. 5 Table of Contents In addition, an epidemic, a pandemic, or another infectious disease outbreak could significantly impact households and businesses, or cause limitations on commercial activity, increased unemployment, and general economic and financial instability.
CTBI has not experienced any data breaches; however, one of our third party vendors did experience a data breach during 2023 as disclosed in note 19 to our consolidated financial statements. The incident did not impact the ongoing operations of CTBI, and we expect our insurance policy to cover many of the costs related to the incident.
CTBI has not experienced any data breaches; however, one of our third party vendors did experience a data breach during 2023, as disclosed in note 19 to our consolidated financial statements in our annual report on Form 10-K for the year ended December 31, 2023.
Competition Strong competition within our market area may reduce our ability to attract and retain deposits and originate loans. We face competition both in originating loans and in attracting deposits. Competition in the financial services industry is intense. We compete for clients by offering excellent service and competitive rates on our loans and deposit products.
CRE held by CTBI is not concentrated in office space/large metro areas and at risk of significant decrease in collateral value. Competition Strong competition within our market area may reduce our ability to attract and retain deposits and originate loans. We face competition both in originating loans and in attracting deposits. Competition in the financial services industry is intense.
For example, consumers can now hold funds that would have been held as bank deposits in mutual funds, brokerage accounts, general purpose reloadable prepaid cards, or cyber currency. In addition, consumers can complete transactions, such as paying bills or transferring funds, directly without utilizing the services of a bank.
Technology and other changes are allowing consumers to complete financial transactions through alternative methods to those which historically involved banks. For example, consumers can now hold funds that would have been held as bank deposits in mutual funds, brokerage accounts, general purpose reloadable prepaid cards, or cyber currency.
Cyber Risk A breach in the security of our systems could disrupt our business, result in the disclosure of confidential information, damage our reputation, and create significant financial and legal exposure for us. Our businesses are dependent on our ability and the ability of our third party service providers to process, record, and monitor a large number of transactions.
Our businesses are dependent on our ability and the ability of our third party service providers to process, record, and monitor a large number of transactions.
These possible impacts may adversely affect our future operating results, including net income, and negatively impact capital. 13 Table of Contents Legal, Legislation, and Regulation Risks Risks Related to Regulatory Policies and Oversight The banking industry is heavily regulated, and our business may be adversely affected by legislation or changes in regulatory policies and oversight.
With this reduced market value, it is more difficult to access this liquidity without an adverse impact on our capital and earnings positions. Legal, Legislation, and Regulation Risks Risks Related to Regulatory Policies and Oversight The banking industry is heavily regulated, and our business may be adversely affected by legislation or changes in regulatory policies and oversight.
The process of eliminating banks as intermediaries (known as disintermediation) could result in the loss of fee income, as well as the loss of deposits and the income that might be generated from those deposits. The related revenue reduction could adversely affect our financial condition, cash flows, and results of operations.
In addition, consumers can complete transactions, such as paying bills or transferring funds, directly without utilizing the services of a bank. The process of eliminating banks as intermediaries (known as disintermediation) could result in the loss of fee income, as well as the loss of deposits and the income that might be generated from those deposits.
If this were to happen, the value of our common stock could decline significantly, and you could lose all or part of your investment. 4 Table of Contents Economic Environment Risks Economic Risk CTBI may continue to be adversely affected by economic and market conditions.
Economic Environment Risks Economic Risk CTBI may continue to be adversely affected by economic and market conditions.
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For example, the spread of COVID-19, which was identified as a pandemic by the World Health Organization and declared a national emergency in the United States, created a global public-health crisis that resulted in significant economic uncertainty, and has impacted household, business, economic, and market conditions, including in the states and local economies in which we conduct nearly all of our business.
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Despite our efforts and those of our third party service providers to ensure the integrity of these systems, it is possible that we or our third party service providers may not be able to anticipate or to implement effective preventive measures against all security breaches of these types, especially because techniques used change frequently or are not recognized until launched, and because security attacks can originate from a wide variety of sources.
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In addition, an epidemic, a pandemic or another infectious disease outbreak, or the resurgence of the COVID-19 pandemic, could again significantly impact households and businesses, or cause limitations on commercial activity, increased unemployment, and general economic and financial instability.
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These possible impacts may adversely affect our future operating results, including net income, and negatively impact capital. 13 Table of Contents The recent increase in longer-term interest rates has negatively impacted the market value of our investment portfolio. We have traditionally relied upon our investment portfolio as a source of liquidity.
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As a result, our profitability depends upon our continued ability to successfully compete in our market areas while achieving our investment objectives. 8 Table of Contents Technology and other changes are allowing consumers to complete financial transactions through alternative methods to those which historically involved banks.
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Our stock price may fluctuate significantly in the future, and these fluctuations may be unrelated to CTBI’s performance. Investor confidence in financial institutions has declined as a result of the bank failures that occurred in 2023.
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Recent events relating to the failures of Silicon Valley Bank and Signature Bank in March 2023 have caused general uncertainty and concerns regarding the adequacy of liquidity in the banking sector as a whole.
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Unresolved Staff Comments None. Item1C. Cybersecurity As referenced in the Operational Risks/Cyber Risks section of Item 1A. Risk Factors included in this Form 10-K, our organization may be materially affected by cybersecurity threats and incidents that target its internally managed information technology systems or our critical vendor systems.
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Our institution utilizes industry standard and regulatory approved assessment tools to identify cybersecurity risks and measure preparedness. The tools provide a repeatable and measurable framework for our organization to measure its cybersecurity preparedness over time.
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The assessment process spans over five domains of interest: (1) cyber risk management and oversight, (2) threat intelligence and collaboration, (3) cybersecurity controls, (4) external dependencies, and (5) cyber incident management and resilience. All domains are currently assessed at an evolving maturity level which is in line with our organizations inherent risk assessment score.
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Our institution has purchased and is using best of breed tools in the areas of endpoint security, Security Information Event Management (“SIEM”), Privileged Access Management (“PAM”), email and web browsing filtering and management, and user analytics.
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We also use a comprehensive third party 24-by-7 Security Operations Center (“SOC”) that monitors, detects, and remediates cybersecurity threats adhering to strict service response levels.
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The internal assessment process and internal tools and SOC related key indicators are reported on a quarterly basis to the Security and Information Security Committee and the Enterprise-wide Risk Management Committee and annually to the Board of Directors. 15 Table of Contents The assessment process, internal tools, and corresponding SOC related services are also reviewed when new threats arise or when considering changes to the business strategy, such as expanding operations, offering new products and services, or entering into new third-party relationships that support critical activities.
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Consequently, management shall determine whether additional risk management practices or controls are needed to maintain or augment the institution’s cybersecurity maturity.
Removed
A comprehensive and layered auditing approach including people, processes and technology components is executed by our internal audit program in order to evaluate the effectiveness of existing controls and ensure that cybersecurity risk has been adequately mitigated within our institution.
Removed
Periodic phishing tests, network and application security reviews, third-party vulnerability assessments and penetration testing are used to gauge the overall effectiveness of our cybersecurity defenses. In an effort to continually share threat intelligence and increase awareness of cybersecurity threats, routine communication to employees is conducted to highlight internal control requirements, common cybersecurity threats and schemes.
Removed
Our incident response team members also participate in the annual Financial Services Information Sharing and Analysis Center tabletop cybersecurity tabletop exercises. Our comprehensive vendor management program and processes assess all new vendors and segments them into criticality tiers.
Removed
Our most critical vendors (tiers 1 and 2) are evaluated annually based on requested vendor documents, such as Statements on Standards Attestation Engagements No. 18 (SSAE 18), financial statements, insurance, and due diligence questionnaires. The vendor management team also monitors all news alerts related to all critical vendors.
Removed
As of the date of this report, we are not aware of any cybersecurity threats, including as a result of any previous cybersecurity incidents, that have materially affected or are reasonably likely to materially affect CTBI. However, future incidents could have a material impact on CTBI’s business strategy, results of operations, or financial condition.
Removed
For additional discussion of the risks posed by cybersecurity threats, see the Operational Risks/Cyber Risks section of Item 1A. Risk Factors included in this Form 10-K .
Removed
Management receives information on cyber activities, incidents, and risk assessments quarterly from the VP/Corporate Information Security, Resilience and Data Officer (CISRDO), the SVP/Manager Application Systems, and the EVP/Operations during the Security and Information Security Committee and the Information Technology Steering Committee meetings. This information is also shared and discussed quarterly with the Enterprise-wide Risk Management Committee.
Removed
Various key risk measures related to cyber risk are tracked and reported quarterly to the Enterprise-wide Risk Management Committee. Our VP/CISRDO has been with CTBI for five years and has extensive 30+ years of experience in information technology management roles in various industries.
Removed
Our SVP/Manager Application Systems has been with CTBI for 32 years and has held various information technology leadership roles. Our EVP/Operations has been with the company for 30 years, leading and guiding our technology teams. The Board of Directors monitors cyber risk through quarterly reports from the Board’s Risk and Compliance Committee.
Removed
This Board committee meets quarterly and receives information concerning cyber risk activities, including cyber risk assessments and incident reporting. The Board also receives an annual report covering cyber risk from the Chief Information Technology Officer.
Removed
Controls over cyber risk are reviewed throughout the year by internal audit activities and third-party assessments whose reports are reviewed by the Board’s Audit Committee. 16 Table of Contents

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

2 edited+6 added−0 removed0 unchanged
Biggest changeItem 1C. Cybersecurity 15 Item 2. Properties 17 Item 3. Legal Proceedings 17 Item 4. Mine Safety Disclosures 17 Information about our Executive Officers 18 PART II 19 Item 5. Market for the Registrant’s Common Equity, Related Shareholder Matters, and Issuer Purchases of Equity Securities 19 Item 6. [Reserved] 20 Item 7.
Biggest changeItem 1C. Cybersecurity 15 Item 2. Properties 17 Item 3. Legal Proceedings 19 Item 4. [Reserved] 19 Information about our Executive Officers 19 PART II 20 Item 5. Market for the Registrant’s Common Equity, Related Shareholder Matters, and Issuer Purchases of Equity Securities 20 Item 6. [Reserved] 21 Item 7.
Management’s Discussion and Analysis of Financial Condition and Results of Operations 21 Item 7A. Quantitative and Qualitative Disclosures about Market Risk 38 Item 8. Financial Statements and Supplementary Data 39 Notes to Consolidated Financial Statements 43 Reports of Independent Registered Public Accounting Firm 99 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 101 Item 9A.
Management’s Discussion and Analysis of Financial Condition and Results of Operations 22 Item 7A. Quantitative and Qualitative Disclosures about Market Risk 38 Item 8. Financial Statements and Supplementary Data 39 Notes to Consolidated Financial Statements 43 Reports of Independent Registered Public Accounting Firm 105 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 109 Item 9A.
Added
Controls and Procedures 109 Item 9B. Other Information 111 PART III 111 Item 10. Directors, Executive Officers, and Corporate Governance of the Registrant 111 Item 11. Executive Compensation 111 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters 111 Item 13. Certain Relationships, Related Transactions, and Director Independence 112 Item 14.
Added
Principal Accountant Fees and Services 112 PART IV 113 Item 15. Exhibits and Financial Statement Schedules 113 Item 16. Form 10-K Summary 115 Signatures 116 Table of Contents 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.
Added
Community Trust Bancorp, Inc.’s (“CTBI”) actual results may differ materially from those included in the forward-looking statements.
Added
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.
Added
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.
Added
These statements are representative only on the date hereof, and CTBI undertakes no obligation to update any forward-looking statements made. PART I

Item 2. Properties

Properties — owned and leased real estate

5 edited+0 added−1 removed1 unchanged
Biggest changeSee notes 7 and 15 to the consolidated financial statements contained herein for the year ended December 31, 2023, for additional information relating to lease commitments and amounts invested in premises and equipment. A new Lexington Market location opened in January 2024 in Boone County, Kentucky, and a new Campbellsville Market location will open in 2024 in Hardin County, Kentucky.
Biggest changeSterling for a branch consolidation scheduled to open in the 3 rd quarter 2025. See notes 7 and 15 to the consolidated financial statements contained herein for the year ended December 31, 2024, for additional information relating to lease commitments and amounts invested in premises and equipment. 18 Table of Contents
Sterling Market 2 0 2 2 locations in Montgomery County, Kentucky Versailles Market (lease land at 2 owned locations) 3 2 5 1 location in Woodford County, Kentucky, 2 locations in Franklin County, Kentucky, and 2 locations in Scott County, Kentucky * Danville Market (lease land at 1 owned location) 3 0 3 2 locations in Boyle County, Kentucky and 1 location in Mercer County, Kentucky * Ashland Market (lease land at 1 owned location) 5 0 5 4 locations in Boyd County, Kentucky and 1 location in Greenup County, Kentucky Flemingsburg Market 3 0 3 3 locations in Fleming County, Kentucky Advantage Valley Market 3 1 4 2 locations in Lincoln County, West Virginia, 1 location in Wayne County, West Virginia, and 1 location in Cabell County, West Virginia Summersville Market 1 0 1 1 location in Nicholas County, West Virginia Middlesboro Market (lease land at 1 owned location) 3 0 3 3 locations in Bell County, Kentucky Williamsburg Market 5 0 5 2 locations in Whitley County, Kentucky and 3 locations in Laurel County, Kentucky Campbellsville Market (lease land at 2 owned locations) 8 0 8 2 locations in Taylor County, Kentucky, 2 locations in Pulaski County, Kentucky, 1 location in Adair County, Kentucky, 1 location in Green County, Kentucky, 1 location in Russell County, Kentucky, and 1 location in Marion County, Kentucky Mt.
Sterling Market 2 0 2 2 locations in Montgomery County, Kentucky Versailles Market (lease land at 2 owned locations) 3 2 5 1 location in Woodford County, Kentucky, 2 locations in Franklin County, Kentucky, and 2 locations in Scott County, Kentucky * Danville Market (lease land at 1 owned location) 3 0 3 2 locations in Boyle County, Kentucky and 1 location in Mercer County, Kentucky * Ashland Market (lease land at 1 owned location) 5 0 5 4 locations in Boyd County, Kentucky and 1 location in Greenup County, Kentucky Flemingsburg Market 3 0 3 3 locations in Fleming County, Kentucky Advantage Valley Market 3 1 4 2 locations in Lincoln County, West Virginia, 1 location in Wayne County, West Virginia, and 1 location in Cabell County, West Virginia Summersville Market 1 0 1 1 location in Nicholas County, West Virginia Middlesboro Market (lease land at 1 owned location) 3 0 3 3 locations in Bell County, Kentucky Williamsburg Market 5 0 5 2 locations in Whitley County, Kentucky and 3 locations in Laurel County, Kentucky Campbellsville Market (lease land at 2 owned locations) 9 0 9 2 locations in Taylor County, Kentucky, 2 locations in Pulaski County, Kentucky, 1 location in Adair County, Kentucky, 1 location in Green County, Kentucky, 1 location in Russell County, Kentucky, 1 location in Marion County, Kentucky, and 1 location in Hardin County, Kentucky Mt.
Following is a schedule of properties owned and leased by CTBI and our subsidiaries as of December 31, 2023: Location Owned Leased Total Banking locations: Community Trust Bank, Inc. * Pikeville Market (lease land at 3 owned locations) 9 1 10 10 locations in Pike County, Kentucky Floyd/Knott/Johnson Market (lease land at 1 owned location) 3 1 4 2 locations in Floyd County, Kentucky, 1 location in Knott County, Kentucky, and 1 location in Johnson County, Kentucky Tug Valley Market (lease land at 1 owned location) 2 0 2 1 location in Pike County, Kentucky, 1 location in Mingo County, West Virginia Whitesburg Market (lease land at 1 owned location) 4 1 5 5 locations in Letcher County, Kentucky Hazard Market (lease land at 2 owned locations) 3 0 3 3 locations in Perry County, Kentucky * Lexington Market (lease land at 3 owned locations) 4 2 6 6 locations in Fayette County, Kentucky Winchester Market 2 0 2 2 locations in Clark County, Kentucky Richmond Market (lease land at 1 owned location) 3 0 3 3 locations in Madison County, Kentucky Mt.
Following is a schedule of properties owned and leased by CTBI and our subsidiaries as of December 31, 2024: Location Owned Leased Total Banking locations: Community Trust Bank, Inc. * Pikeville Market (lease land at 3 owned locations) 9 1 10 10 locations in Pike County, Kentucky Floyd/Knott/Johnson Market (lease land at 1 owned location) 3 1 4 2 locations in Floyd County, Kentucky, 1 location in Knott County, Kentucky, and 1 location in Johnson County, Kentucky Tug Valley Market (lease land at 1 owned location) 2 0 2 1 location in Pike County, Kentucky, 1 location in Mingo County, West Virginia Whitesburg Market (lease land at 1 owned location) 4 1 5 5 locations in Letcher County, Kentucky Hazard Market (lease land at 2 owned locations) 3 0 3 3 locations in Perry County, Kentucky * Lexington Market (lease land at 3 owned locations) 5 2 7 6 locations in Fayette County, Kentucky, 1 location in Boone County, Kentucky 17 Table of Contents Winchester Market 2 0 2 2 locations in Clark County, Kentucky Richmond Market (lease land at 1 owned location) 3 0 3 3 locations in Madison County, Kentucky ** Mt.
Vernon Market 2 0 2 2 locations in Rockcastle County, Kentucky * LaFollette Market 3 0 3 2 locations in Campbell County, Tennessee and 1 location in Anderson County, Tennessee Total banking locations 71 8 79 Operational locations: Community Trust Bank, Inc.
Vernon Market 2 0 2 2 locations in Rockcastle County, Kentucky * LaFollette Market 3 0 3 2 locations in Campbell County, Tennessee and 1 location in Anderson County, Tennessee Total banking locations 73 8 81 Operational locations: Community Trust Bank, Inc.
Pikeville (Pike County, Kentucky) (lease land at 1 owned location) 1 0 1 Total operational locations 1 0 1 Total locations 72 8 80 *Community Trust and Investment Company has leased offices in the main office locations in these markets.
Pikeville (Pike County, Kentucky) (lease land at 1 owned location) 1 0 1 Total operational locations 1 0 1 Total locations 74 8 82 * Community Trust and Investment Company has leased offices in the main office locations in these markets. ** Land was purchased in Mt.
Removed
We owned the land for both of these locations at December 31, 2023.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

8 edited+3 added−3 removed0 unchanged
Biggest changeHancock became Secretary of CTBI on February 7, 2022. (5) Mr. Jameson is a non-voting member of the Executive Committee. (6) Mr. Tackett became Executive Vice President of CTBI and President of the Eastern Region of CTB on February 7, 2022. He previously held the position of President of the Floyd, Knott, and Johnson Market of CTB. (7) Ms.
Biggest changeDollins became Executive Vice President of CTBI and President of the Central Kentucky Region of CTB on January 3, 2023. She previously held the position of President of the Versailles Market of CTB. (4) Mr. Hancock became Secretary of CTBI on February 7, 2022. (5) Mr. Jameson is a non-voting member of the Executive Committee. (6) Mr.
Item 4. Mine Safety Disclosures Not applicable. 17 Table of Contents Information about our Executive Officers Set forth below are the executive officers of CTBI, their positions with CTBI, and the year in which they first became an executive officer. Name and Age (1) Positions and Offices Currently Held Date First Became Executive Officer Principal Occupation Mark A.
Item 4. [Reserved] Information about our Executive Officers Set forth below are the executive officers of CTBI, their positions with CTBI, and the year in which they first became an executive officer. Name and Age (1) Positions and Offices Currently Held Date First Became Executive Officer Principal Occupation Mark A.
Gooch retained his previous position as Chief Executive Officer of CTB and assumed the additional roles of Chairman of CTB and Chairman of CTIC also effective with Ms. Hale’s retirement on February 7, 2022. (3) Mr. Newsom became President of CTB on February 7, 2022. He previously served as President of the Eastern Region of CTB. (4) Mr.
Gooch became President of CTBI on July 27, 2021 and assumed the additional positions of Vice Chairman and Chief Executive Officer of CTBI effective February 7, 2022. Mr. Gooch retained his previous position as Chief Executive Officer of CTB and assumed the additional roles of Chairman of CTB and Chairman of CTIC also effective on February 7, 2022. (3) Ms.
Gooch; 65 Vice Chairman, President, and Chief Executive Officer 1997 (2) Vice Chairman, President, and CEO of CTBI Kevin J. Stumbo; 63 Executive Vice President, Chief Financial Officer, and Treasurer 2002 Executive Vice President/Chief Financial Officer of CTBI Richard W. Newsom; 69 Executive Vice President 2002 (3) Executive Vice President/President of CTB Andy D.
Gooch; 66 Chairman, President, and Chief Executive Officer 1997 (2) Chairman, President, and CEO of CTBI Kevin J. Stumbo; 64 Executive Vice President, Chief Financial Officer, and Treasurer 2002 Executive Vice President/ Chief Financial Officer of CTBI Billie J. Dollins; 64 Executive Vice President 2023 (3) Executive Vice President/ Central Kentucky Region President of CTB C.
Jameson; 67 Executive Vice President 2004 (5) Executive Vice President/Chief Internal Audit & Risk Officer of CTB Ricky D. Sparkman; 61 Executive Vice President 2002 Executive Vice President/South Central Region President of CTB D.
Wayne Hancock; 50 Executive Vice President and Secretary 2014 (4) Executive Vice President/ Chief Legal Officer of CTB Steven E. Jameson; 68 Executive Vice President 2004 (5) Executive Vice President/ Chief Internal Audit & Risk Officer of CTB D. Andrew Jones; 62 Executive Vice President 2010 Executive Vice President/ Northeastern Region President of CTB Thomas E.
Gartner, former Executive Vice President of CTBI and Executive Vice President/Chief Credit Officer of CTB, retired effective December 29, 2023. Mr. Smith was named Executive Vice President of CTBI and Executive Vice President/Chief Credit Officer of CTB effective January 2, 2024. 18 Table of Contents PART II
Newsom became President of CTB on February 7, 2022. He previously served as President of the Eastern Region of CTB. (8) Mr. Smith was named Executive Vice President of CTBI and Executive Vice President/Chief Credit Officer of CTB effective January 2, 2024. He was previously Senior Vice President/Loan Review Manager of CTB. (9) Mr.
Smith; 53 Executive Vice President 2024 (8) Executive Vice President/Chief Credit Officer of CTB (1) The ages listed for CTBI’s executive officers are as of February 28, 2024. (2) Mr.
Waters; 59 Executive Vice President 2011 President and CEO of CTIC 19 Table of Contents (1) The ages listed for CTBI’s executive officers are as of February 28, 2025. (2) Mr. Gooch was appointed Chairman of the Board effective with the retirement of M. Lynn Parrish on March 17, 2024. Mr.
Dollins became Executive Vice President of CTBI and President of the Central Kentucky Region of CTB on January 3, 2023, following the retirement of Larry W. Jones. She previously held the position of President of the Versailles Market of CTB. (8) James J.
Tackett became Executive Vice President of CTBI and President of the Eastern Region of CTB on February 7, 2022. He previously held the position of President of the Floyd, Knott, and Johnson Market of CTB. PART II
Removed
Waters; 58 Executive Vice President 2011 President and CEO of CTIC C. Wayne Hancock; 49 Executive Vice President and Secretary 2014 (4) Executive Vice President/Chief Legal Officer of CTB James B. Draughn; 64 Executive Vice President 2001 Executive Vice President/Operations of CTB Steven E.
Added
McCoy; 56 Executive Vice President 2025 (6) Executive Vice President/Operations of CTB Richard W. Newsom; 70 Executive Vice President 2002 (7) Executive Vice President/ President of CTB Mark E. Smith; 54 Executive Vice President 2024 (8) Executive Vice President/ Chief Credit Officer of CTB Ricky D.
Removed
Andrew Jones; 61 Executive Vice President 2010 Executive Vice President/Northeastern Region President of CTB David Tackett; 58 Executive Vice President 2022 (6) Executive Vice President/Eastern Region President of CTB Billie J. Dollins; 63 Executive Vice President 2023 (7) Executive Vice President/Central Kentucky Region President of CTB Mark E.
Added
Sparkman; 62 Executive Vice President 2002 Executive Vice President/ South Central Region President of CTB David Tackett; 59 Executive Vice President 2022 (9) Executive Vice President/ Eastern Region President of CTB Andy D.
Removed
Gooch became President of CTBI on July 27, 2021 and assumed the additional positions of Vice Chairman and Chief Executive Officer of CTBI effective February 7, 2022, upon the retirement of Jean R. Hale. Mr.
Added
McCoy was named Executive Vice President of CTBI and Executive Vice President/Operations of CTB effective February 1, 2025, following the retirement of James B. Draughn, former Executive Vice President of CTBI and Executive Vice President/Operations of CTB, effective January 31, 2025. Mr. McCoy previously held the position of Senior Vice President/Application Systems Manager. (7) Mr.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

8 edited+0 added−0 removed0 unchanged
Biggest changeComparison of 5 Year Cumulative Total Return among Community Trust Bancorp, Inc., NASDAQ Stock Market (U.S.), and NASDAQ Bank Stocks Fiscal Year Ending December 31 ($) 2018 2019 2020 2021 2022 2023 Community Trust Bancorp, Inc. 100.00 121.48 100.49 122.54 133.78 132.99 NASDAQ Stock Market (U.S.) 100.00 131.17 159.07 200.26 160.75 203.23 NASDAQ Bank Stocks 100.00 137.18 119.62 164.26 135.89 149.56
Biggest changeComparison of 5 Year Cumulative Total Return among Community Trust Bancorp, Inc., NASDAQ Stock Market (U.S.), and NASDAQ Bank Stocks Fiscal Year Ending December 31 ($) 2019 2020 2021 2022 2023 2024 Community Trust Bancorp, Inc. 100.00 82.72 100.87 110.12 109.47 137.01 NASDAQ Stock Market (U.S.) 100.00 121.27 152.67 122.55 154.93 192.86 NASDAQ Bank Stocks 100.00 87.20 119.74 99.06 109.02 146.80
For information concerning restrictions on dividends from the subsidiary bank to CTBI, see note 20 to the consolidated financial statements contained herein for the year ended December 31, 2023. Stock Repurchases CTBI did not acquire any shares of stock through the stock repurchase program during the year 2023. There are 1,034,706 shares remaining under CTBI's current repurchase authorization.
For information concerning restrictions on dividends from the subsidiary bank to CTBI, see note 20 to the consolidated financial statements contained herein for the year ended December 31, 2024. Stock Repurchases CTBI did not acquire any shares of stock through the stock repurchase program during the year 2024. There are 1,034,706 shares remaining under CTBI’s current repurchase authorization.
Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters. 19 Table of Contents Common Stock Performance The following graph shows the cumulative total return experienced by CTBI’s shareholders during the last five years compared to the NASDAQ Stock Market (U.S.) and the NASDAQ Bank Stock Index.
Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters. Common Stock Performance The following graph shows the cumulative total return experienced by CTBI’s shareholders during the last five years compared to the NASDAQ Stock Market (U.S.) and the NASDAQ Bank Stock Index.
The graph assumes the investment of $100 on December 31, 2018 in CTBI’s common stock and in each index and the reinvestment of all dividends paid during the five-year period.
The graph assumes the investment of $100 on December 31, 2019 in CTBI’s common stock and in each index and the reinvestment of all dividends paid during the five-year period.
For further information, see the Stock Repurchase Program section of Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations. Securities Authorized for Issuance Under Equity Compensation Plans For information concerning securities authorized for issuance under CTBI’s equity compensation plans, see Part III, Item 12.
For further information, see the Stock Repurchase Program section of Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations. 20 Table of Contents Securities Authorized for Issuance Under Equity Compensation Plans For information concerning securities authorized for issuance under CTBI’s equity compensation plans, see Part III, Item 12.
The current year cash dividend ratio was 41.3%, and the 10-year average dividend payout ratio has been 42.2%. Dividends are typically paid on a quarterly basis. Future dividends are subject to the discretion of CTBI’s Board of Directors, cash needs, general business conditions, dividends from our subsidiaries, and applicable governmental regulations and policies.
The current year cash dividend ratio was 40.3%, and the 10-year average dividend payout ratio has been 41.5%. Dividends are typically paid on a quarterly basis. Future dividends are subject to the discretion of CTBI’s Board of Directors, cash needs, general business conditions, dividends from our subsidiaries, and applicable governmental regulations and policies.
Dividends The annual dividend paid to our stockholders was increased from $1.68 per share to $1.80 per share during 2023. We have adopted a conservative policy of cash dividends by generally maintaining an average annual cash dividend ratio of approximately 45%, with periodic stock dividends.
Dividends The annual dividend paid to our stockholders was increased from $1.80 per share to $1.86 per share during 2024. We have adopted a conservative policy of cash dividends by generally maintaining an average annual cash dividend ratio of approximately 45%, with periodic stock dividends.
Item 5. Market for the Registrant’s Common Equity, Related Shareholder Matters, and Issuer Purchases of Equity Securities Our common stock is listed on The NASDAQ Global Select Market under the symbol CTBI. As of January 31, 2024, there were approximately 8,400 holders of record of our outstanding common shares.
Item 5. Market for the Registrant’s Common Equity, Related Shareholder Matters, and Issuer Purchases of Equity Securities Our common stock is listed on The NASDAQ Global Select Market under the symbol CTBI. As of January 31, 2025, there were approximately 9,800 holders of record of our outstanding common shares.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

63 edited+11 added−16 removed80 unchanged
Biggest changeNoninterest income was impacted year over year by a $2.4 million decline in loan related fees, a $1.1 million decline in gains on sales of loans, and a $0.4 million decline in brokerage revenue, offset by increases of $0.9 million in deposit related fees, $0.6 million in trust revenue, $1.2 million in securities gains, and $0.8 million in bank owned life insurance revenue . 26 Table of Contents Noninterest Expense (dollars in thousands) Year Ended December 31 2023 2022 Percent Change Salaries $ 51,283 $ 48,934 4.8 % Employee benefits 22,428 23,556 (4.8 )% Net occupancy and equipment 11,843 11,083 6.9 % Data processing 9,726 8,910 9.2 % Legal and professional fees 3,350 3,434 (2.4 )% Advertising and marketing 3,214 3,005 7.0 % Taxes other than property and payroll 1,706 1,570 8.7 % Net other real estate owned expense 350 456 (23.4 )% Other 21,490 20,123 6.8 % Total noninterest expense $ 125,390 $ 121,071 3.6 % Noninterest expense for the year 2023 was $125.4 million compared to $121.1 million for the year 2022 with increases of $1.2 million in personnel expense, $0.8 million in occupancy and equipment, $0.8 million in data processing expense, $1.0 million in FDIC insurance premiums, and $0.4 million in telephone expense.
Biggest changeNoninterest Expense (dollars in thousands) Year Ended December 31 2024 2023 Percent Change Salaries $ 52,757 $ 51,283 2.9 % Employee benefits 26,670 22,428 18.9 Net occupancy and equipment 12,204 11,843 3.1 Data processing 11,172 9,726 14.9 Legal and professional fees 3,873 3,350 15.6 Advertising and marketing 3,130 3,214 (2.6 ) Taxes other than property and payroll 1,754 1,706 2.8 Other 19,363 21,840 (11.3 ) Total noninterest expense $ 130,923 $ 125,390 4.4 % Noninterest expense for the year 2024 was $130.9 million compared to $125.4 million for the year 2023.
The following table shows Board authorizations and repurchases made through the stock repurchase program for the years 1998 through 2023: Board Authorizations Repurchases* Shares Available for Repurchase Average Price ($) # of Shares 1998 500,000 - 0 1999 0 14.45 144,669 2000 1,000,000 10.25 763,470 2001 0 13.35 489,440 2002 0 17.71 396,316 2003 1,000,000 19.62 259,235 2004 0 23.14 60,500 2005 0 - 0 2006 0 - 0 2007 0 28.56 216,150 2008 0 25.53 102,850 2009-2019 0 - 0 2020 1,000,000 33.64 32,664 2021 0 - 0 2022 0 - 0 2023 0 - 0 Total 3,500,000 16.17 2,465,294 1,034,706 *Repurchased shares and average prices have been restated to reflect stock dividends that have occurred; however, board authorized shares have not been adjusted.
The following table shows Board authorizations and repurchases made through the stock repurchase program for the years 1998 through 2024: Board Authorizations Repurchases* Shares Available for Repurchase Average Price ($) # of Shares 1998 500,000 - 0 1999 0 14.45 144,669 2000 1,000,000 10.25 763,470 2001 0 13.35 489,440 2002 0 17.71 396,316 2003 1,000,000 19.62 259,235 2004 0 23.14 60,500 2005 0 - 0 2006 0 - 0 2007 0 28.56 216,150 2008 0 25.53 102,850 2009-2019 0 - 0 2020 1,000,000 33.64 32,664 2021 0 - 0 2022 0 - 0 2023 0 - 0 2024 0 - 0 Total 3,500,000 16.17 2,465,294 1,034,706 *Repurchased shares and average prices have been restated to reflect stock dividends that have occurred; however, board authorized shares have not been adjusted.
The amendments in this ASU eliminate the accounting guidance for 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 along with requiring that disclosures be added by year of origination for gross charge-off information for financing receivables.
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.
As of December 31, 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. 34 Table of Contents Impact of Inflation, Changing Prices, and Economic Conditions The majority of our assets and liabilities are monetary in nature.
As of December 31, 2024, 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. 34 Table of Contents Impact of Inflation, Changing Prices, and Economic Conditions The majority of our assets and liabilities are monetary in nature.
We believe our liquidity sources as mentioned in the liquidity discussion are adequate to meet our future cash requirements. 31 Table of Contents Investment Maturities Estimated Maturity at December 31, 2023 Within 1 Year 1-5 Years 5-10 Years After 10 Years Total Fair Value Amortized Cost (in thousands) Amount Yield Amount Yield Amount Yield Amount Yield Amount Yield Amount U.S.
We believe our liquidity sources as mentioned in the liquidity discussion are adequate to meet our future cash requirements. 31 Table of Contents Investment Maturities Estimated Maturity at December 31, 2024 Within 1 Year 1-5 Years 5-10 Years After 10 Years Total Fair Value Amortized Cost (in thousands) Amount Yield Amount Yield Amount Yield Amount Yield Amount Yield Amount U.S.
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 $6.4 million in loan related borrowings is based on a fixed rate of 3.25%.
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%.
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 83% based on the loan production during the number of months included in the review scope.
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.
As of December 31, 2023, a total of 2,465,294 shares have been repurchased through this program, leaving 1,034,706 shares remaining under our current repurchase authorization.
As of December 31, 2024, a total of 2,465,294 shares have been repurchased through this program, leaving 1,034,706 shares remaining under our current repurchase authorization.
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.
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. 35 Table of Contents We believe the application of accounting policies and the estimates required therein are reasonable.
(3) Tax exempt income on securities and loans is reported on a fully taxable equivalent basis using a 24.95% rate. 24 Table of Contents Net Interest Differential The following table illustrates the approximate effect of volume and rate changes on net interest differentials between 2023 and 2022.
(3) Tax exempt income on securities and loans is reported on a fully taxable equivalent basis using a 24.95% rate. 25 Table of Contents Net Interest Differential The following table illustrates the approximate effect of volume and rate changes on net interest differentials between 2024 and 2023.
Rather, the goals represent a range of target performance for 2024. There is no assurance that any or all of these goals will be achieved.
Rather, the goals represent a range of target performance for 2025. There is no assurance that any or all of these goals will be achieved.
For further information, see Item 1 of this annual report. 21 Table of Contents Financial Goals and Performance The following table shows the primary measurements used by management to assess annual performance. The goals in the table below should not be viewed as a forecast of our performance for 2024.
For further information, see Item 1 of this annual report. 22 Table of Contents Financial Goals and Performance The following table shows the primary measurements used by management to assess annual performance. The goals in the table below should not be viewed as a forecast of our performance for 2025.
Our purchase obligations consist of agreements to purchase goods and services entered into in the ordinary course of business. As of December 31, 2023, the value of our non-cancellable unconditional purchase obligations was $9.8 million. These contractual obligations impact our liquidity and capital resource needs.
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. These contractual obligations impact our liquidity and capital resource needs.
In 2023 and 2022, proceeds of $15.2 million and $66.0 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.
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.
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 have identified the following critical accounting policies: 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.
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, TDR, nonaccrual status, and adequate loan loss reserves.
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.
Federal Home Loan Bank advances were $0.3 million at December 31, 2023 compared to $0.4 million at December 31, 2022. As of December 31, 2023, we had a $476.2 million available borrowing position with the Federal Home Loan Bank.
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.
Cash dividends were $1.80 per share for 2023 compared to $1.68 per share for 2022. We retained 58.7% of our earnings in 2023 compared to 63.4% in 2022. Insured depository institutions are required to meet certain capital level requirements.
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. Insured depository institutions are required to meet certain capital level requirements.
As of December 31, 2023, we had approximately $271.4 million in cash and cash equivalents and approximately $157.5 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.
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.
Repayment of the liability will be provided by the loan payments made by the loan customer. This principal amount is also guaranteed by the Small Business Administration. Interest on long-term debt assumes the liability will not be prepaid and interest is calculated to maturity.
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.
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 December 31, 2023, we had total consolidated assets of $5.8 billion and total consolidated deposits, including repurchase agreements, of $4.9 billion.
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.
The following table shows our estimated earnings sensitivity profile as of December 31, 2023: Change in Interest Rates (basis points) Percentage Change in Net Interest Income (12 Months) +400 11.50% +300 8.89% +200 6.29% +100 3.65% -100 (0.67)% -200 (2.41)% -300 (4.06)% -400 (5.68)% The following table shows our estimated earnings sensitivity profile as of December 31, 2022: Change in Interest Rates (basis points) Percentage Change in Net Interest Income (12 Months) +400 9.98% +300 7.26% +200 4.60% +100 1.94% -100 (1.95)% -200 (3.92)% -300 (5.96)% -400 (7.91)% 33 Table of Contents The simulation model used the yield curve spread evenly over a twelve-month period.
The following table shows our estimated earnings sensitivity profile as of December 31, 2024: Change in Interest Rates (basis points) Percentage Change in Net Interest Income (12 Months) +400 3.83% +300 2.88% +200 1.93% +100 0.98% -100 (1.34)% -200 (2.76)% -300 (4.07)% -400 (5.32)% The following table shows our estimated earnings sensitivity profile as of December 31, 2023: Change in Interest Rates (basis points) Percentage Change in Net Interest Income (12 Months) +400 11.50% +300 8.89% +200 6.29% +100 3.65% -100 (0.67)% -200 (2.41)% -300 (4.06)% -400 (5.68)% 33 Table of Contents The simulation model used the yield curve spread evenly over a twelve-month period.
As of December 31, 2023, the commitments due in one year or less for other commitments is $730.4 million and commitments due in more than one year is $305.6 million. Refer to note 17 to the consolidated financial statements contained herein for additional information regarding other commitments.
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.
Our yield on average earning assets for the year 2023 increased 128 basis points from prior year, and our cost of interest bearing funds increased 187 basis points during the same time period. Our net interest margin, on a fully tax equivalent basis, for the year 2023 remained at 3.32% from the year ended December 31, 2022.
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.
We have analyzed our financial exposure related to the discontinuation of LIBOR and consider our exposure to be insignificant. As of December 31, 2023, our remaining contractual commitment for operating and finance leases due in one year or less is $2.0 million and operating leases due in more than one year is $21.4 million.
We have analyzed our financial exposure related to the discontinuation of LIBOR and consider our exposure to be insignificant. 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.
Balance Sheet Review CTBI’s total assets at $5.8 billion increased $389.4 million, or 7.2%, from December 31, 2022. Loans outstanding at December 31, 2023 were $4.1 billion, increasing $341.6 million, or 9.2%, year over year.
Balance Sheet Review 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.
Total shareholders’ equity at December 31, 2023 was $702.2 million. Trust assets under management at December 31, 2023 were $3.4 billion, including CTB’s investment portfolio totaling $1.2 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.
In a down-rate environment, net interest income would decrease 0.67% at a 100 basis point change, decrease by 2.41% at a 200 basis point change, decrease by 4.06% at a 300 basis point change, and decrease by 5.68% at a 400 basis point change over one year.
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.
The maximum balance for federal funds purchased and repurchase agreements at any month-end during 2022 occurred at February 28, 2022, with a month-end balance of $277.9 million. Asset Quality CTBI’s total nonperforming loans were $14.0 million, or 0.34% of total loans, at December 31, 2023 compared to $15.3 million, or 0.41% of total loans, at December 31, 2022.
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. Asset Quality 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.
Capital Resources We continue to grow our shareholders’ equity while also providing an annual dividend yield for the year 2023 of 4.10% to shareholders. Shareholders’ equity increased 11.8% from December 31, 2022 to $702.2 million at December 31, 2023. Our primary source of capital growth is the retention of earnings.
Capital Resources 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.
With certain exceptions, the value of stock repurchased is determined net of stock issued in the year, including shares issued pursuant to compensatory arrangements. 35 Table of Contents 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.
Critical Accounting Policies and Estimates The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) 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.
See “Cautionary Statement Regarding Forward Looking Statements.” 2023 Goals 2023 Performance 2024 Goals Basic earnings per share $4.57 - $4.75 $4.36 $4.31 - $4.49 Net income $82.0 - $85.4 million $78.0 million $77.7 - $80.8 million ROAA 1.50% - 1.56% 1.40% 1.33% - 1.39% ROAE 12.26% - 12.76% 11.75% 10.99% - 11.44% Revenues $237.9 - $247.6 million $230.8 million $236.8 - $246.5 million Noninterest revenue as % of total revenue 24.00% - 26.00% 25.00% 23.50% - 25.50% Assets $5.38 - $5.72 billion $5.77 billion $5.74 - $6.10 billion Loans $3.77 - $3.92 billion $4.05 billion $4.18 - $4.35 billion Deposits, including repurchase agreements $4.64 - $4.83 billion $4.95 billion $4.97 - $5.17 billion Shareholders’ equity $686.5 - $714.5 million $702.2 million $711.2 - $740.3 million Results of Operations and Financial Condition We reported earnings of $78.0 million, or $4.36 per basic share, for the year ended December 31, 2023 compared to $81.8 million, or $4.59 per basic share, for the year ended December 31, 2022.
See “Cautionary Statement Regarding Forward Looking Statements.” 2024 Goals 2024 Performance 2025 Goals Basic earnings per share $ 4.31 - $4.49 $ 4.61 $4.86 - $5.06 Net income $77.7 - $80.8 million $82.8 million $88.0 - $91.6 million ROAA 1.33% - 1.39% 1.41% 1.41% - 1.46% ROAE 10.99% - 11.44% 11.31% 11.17% - 11.62% Revenues $236.8 - $246.5 million $248.6 million $261.6 - $272.3 million Noninterest revenue as % of total revenue 23.50% - 25.50% 25.00% 23.50% - 25.50% Assets $5.74 - $6.10 billion $6.19 billion $6.19 - $6.57 billion Loans $4.18 - $4.35 billion $4.49 billion $4.53 - $4.71 billion Deposits, including repurchase agreements $4.97 - $5.17 billion $5.31 billion $5.32 - $5.54 billion Shareholders’ equity $711.2 - $740.3 million $757.6 million $797.8 - $830.3 million Results of Operations and Financial Condition 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.
At December 31, 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.
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.
The measurement at December 31, 2023 estimates that our net interest income in an up-rate environment would increase by 11.50% at a 400 basis point change, increase by 8.89% at a 300 basis point change, increase by 6.29% at a 200 basis point change, and increase by 3.65% at a 100 basis point change.
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.
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.
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.
Noninterest bearing deposits decreased $134.2 million over prior year. Average loans to deposits, including repurchase agreements, for the year ended December 31, 2023 were 81.5% compared to 75.8% for the year ended December 31, 2022. Provision for Credit Losses P rovision for credit losses for the year 2023 was $6.8 million compared to $4.9 million during the year 2022 .
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. Provision for Credit Losses P rovision for credit losses for the year 2024 was $11.0 million compared to $6.8 million during the year 2023 .
Total revenue for 2023 was $3.8 million above prior year, as net interest revenue increased $4.0 million and noninterest income decreased $0.3 million compared to prior year. 22 Table of Contents 2023 Highlights ❖ Net interest income for the year ended December 31, 2023 increased $4.0 million, or 2.4%, from December 31, 2022 with a $114.8 million increase in average earning assets. ❖ Provision for credit losses was $6.8 million for the year ended December 31, 2023 compared to $4.9 million for the year ended December 31, 2022. ❖ Our loan portfolio increased $341.6 million, or 9.2%, from December 31, 2022 to December 31, 2023. ❖ Net loan charge-offs were $3.2 million, or 0.08% of average loans annualized, for the year ended December 31, 2023 compared to $0.7 million, or 0.02% of average loans annualized, for the year ended December 31, 2022. ❖ Our total nonperforming loans at $14.0 million at December 31, 2023 decreased $1.3 million, or 8.8%, from December 31, 2022.
The amount of income tax credits and other tax benefits recognized was $4.3 million for the year ended December 31, 2024. 23 Table of Contents 2024 Highlights ❖ Net interest income for the year ended December 31, 2024 increased $12.9 million, or 7.4%, from December 31, 2023 with a $325.8 million increase in average earning assets. ❖ Provision for credit losses was $11.0 million for the year ended December 31, 2024 compared to $6.8 million for the year ended December 31, 2023. ❖ Our loan portfolio increased $435.7 million, or 10.8%, from December 31, 2023 to December 31, 2024. ❖ Net loan charge-offs were $5.5 million, or 0.13% of average loans, for the year ended December 31, 2024 compared to $3.2 million, or 0.08% of average loans, for the year ended December 31, 2023. ❖ Our total nonperforming loans at $26.7 million at December 31, 2024 increased $12.7 million, or 91.1%, from December 31, 2023.
Nonperforming assets at $15.6 million decreased $3.4 million, or 17.9%, from December 31, 2022. ❖ Deposits, including repurchase agreements, at December 31, 2023 increased $308.3 million, or 6.6%, from December 31, 2022. ❖ Noninterest income for the year ended December 31, 2023 of $57.7 million decreased $0.3 million, or 0.4%, compared to the year ended December 31, 2022. ❖ Noninterest expense for the year ended December 31, 2023 of $125.4 million increased $4.3 million, or 3.6%, compared to the year ended December 31, 2022.
Nonperforming assets at $30.3 million increased $14.7 million, or 94.7%, from December 31, 2023. ❖ Deposits, including repurchase agreements, at December 31, 2024 increased $360.5 million, or 7.3%, from December 31, 2023. ❖ Noninterest income for the year ended December 31, 2024 of $62.6 million increased $4.9 million, or 8.5%, compared to the year ended December 31, 2023. ❖ Noninterest expense for the year ended December 31, 2024 of $130.9 million increased $5.5 million, or 4.4%, compared to the year ended December 31, 2023.
Noninterest Income (dollars in thousands) Year Ended December 31 2023 2022 Percent Change Deposit service charges $ 29,935 $ 29,049 3.0 % Trust revenue 13,025 12,394 5.1 % Gains on sales of loans 395 1,525 (74.1 )% Loan related fees 3,792 6,185 (38.7 )% Bank owned life insurance revenue 3,517 2,708 29.8 % Brokerage revenue 1,473 1,846 (20.2 )% Other 5,522 4,209 31.2 % Total noninterest income $ 57,659 $ 57,916 (0.4 )% Noninterest income for the year 2023 was $57.7 million compared to $57.9 million for the year 2022.
See below for discussion of our allowance for credit losses. 26 Table of Contents Noninterest Income (dollars in thousands) Year Ended December 31 2024 2023 Percent Change Deposit service charges $ 29,824 $ 29,935 (0.4 )% Trust revenue 14,921 13,025 14.6 Gains on sales of loans 294 395 (25.6 ) Loan related fees 4,957 3,792 30.7 Bank owned life insurance revenue 5,236 3,517 48.9 Brokerage revenue 2,272 1,473 54.3 Other 5,061 5,522 (8.3 ) Total noninterest income $ 62,565 $ 57,659 8.5 % Noninterest income for the year 2024 was $62.6 million compared to $57.7 million for the year 2023 .
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.
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.
Nonperforming assets to loans and foreclosed properties at December 31, 2023 were 0.4% compared to 0.5% at December 31, 2022. 29 Table of Contents Net loan charge-offs were $3.2 million, 0.08% of average loans annualized, for the year ended December 31, 2023, compared to $0.7 million, 0.02% of average loans annualized, for the year ended December 31, 2022.
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. 29 Table of Contents Allowance for Credit Losses 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.
On March 5, 2021, LIBOR’s 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.
Refer to note 10 to the consolidated financial statements contained herein for additional information regarding long-term debt. 30 Table of Contents 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.
Treasury and agencies 855,300 17,369 2.03 1,022,511 14,699 1.44 Tax exempt state and political subdivisions (3) 105,158 3,568 3.39 119,118 3,795 3.19 Other securities 243,012 9,894 4.07 260,423 6,996 2.69 Federal Reserve Bank and Federal Home Loan Bank stock 10,841 759 7.00 12,388 603 4.87 Federal funds sold 256 9 3.52 414 15 3.62 Interest bearing deposits 138,646 6,968 5.03 158,563 2,484 1.57 Other investments 245 0 0.00 245 0 0.00 Investment in unconsolidated subsidiaries 1,857 129 6.95 1,849 62 3.35 Total earning assets $ 5,244,128 $ 269,841 5.15 % $ 5,129,345 $ 198,698 3.87 % Allowance for credit losses (47,606 ) (43,081 ) 5,196,522 5,086,264 Nonearning assets: Cash and due from banks 61,184 59,645 Premises and equipment and right of use assets, net 60,232 53,928 Other assets 254,203 238,859 Total assets $ 5,572,141 $ 5,438,696 Interest bearing liabilities: Deposits: Savings and demand deposits $ 2,136,653 $ 52,336 2.45 % $ 2,020,065 $ 16,526 0.82 % Time deposits 1,071,584 28,831 2.69 1,027,726 7,542 0.73 Repurchase agreements and federal funds purchased 219,591 8,994 4.10 243,102 2,540 1.04 Advances from Federal Home Loan Bank 18,494 1,004 5.43 898 20 2.23 Long-term debt 64,351 4,257 6.62 57,841 1,943 3.36 Finance lease liability 3,469 118 3.40 1,589 69 4.34 Total interest bearing liabilities $ 3,514,142 $ 95,540 2.72 % $ 3,351,221 $ 28,640 0.85 % Noninterest bearing liabilities: Demand deposits 1,343,917 1,398,778 Other liabilities 50,418 46,274 Total liabilities 4,908,477 4,796,273 Shareholders’ equity 663,664 642,423 Total liabilities and shareholders’ equity $ 5,572,141 $ 5,438,696 Net interest income, tax equivalent $ 174,301 $ 170,058 Less tax equivalent interest income 1,191 956 Net interest income $ 173,110 $ 169,102 Net interest spread 2.43 % 3.02 % Benefit of interest free funding 0.89 0.30 Net interest margin 3.32 % 3.32 % (1) Interest includes fees on loans of $1,770 and $1,723 in 2023 and 2022, respectively.
Treasury and agencies 775,788 16,526 2.13 855,300 17,369 2.03 Tax exempt state and political subdivisions (3) 102,783 3,401 3.31 105,158 3,568 3.39 Other securities 227,116 8,427 3.71 243,012 9,894 4.07 Federal Reserve Bank and Federal Home Loan Bank stock 10,099 783 7.75 10,841 759 7.00 Federal funds sold 19 1 5.26 256 9 3.52 Interest bearing deposits 204,113 10,396 5.09 138,646 6,968 5.03 Other investments 245 6 2.45 245 0 0.00 Investment in unconsolidated subsidiaries 1,858 132 7.10 1,857 129 6.95 Total earning assets $ 5,569,948 $ 314,582 5.65 % $ 5,244,128 $ 269,841 5.15 % Allowance for credit losses (51,749 ) (47,606 ) 5,518,199 5,196,522 Nonearning assets: Cash and due from banks 58,714 61,184 Premises and equipment and right of use assets, net 62,584 60,232 Other assets 254,498 254,203 Total assets $ 5,893,995 $ 5,572,141 Interest bearing liabilities: Deposits: Savings and demand deposits $ 2,309,430 $ 62,812 2.72 % $ 2,136,653 $ 52,336 2.45 % Time deposits 1,260,730 49,704 3.94 1,071,584 28,831 2.69 Repurchase agreements and federal funds purchased 229,408 10,393 4.53 219,591 8,994 4.10 Advances from Federal Home Loan Bank 597 16 2.68 18,494 1,004 5.43 Long-term debt 64,130 4,365 6.81 64,351 4,257 6.62 Finance lease liability 3,438 158 4.60 3,469 118 3.40 Total interest bearing liabilities $ 3,867,733 $ 127,448 3.30 % $ 3,514,142 $ 95,540 2.72 % Noninterest bearing liabilities: Demand deposits 1,238,101 1,343,917 Other liabilities 56,042 50,418 Total liabilities 5,161,876 4,908,477 Shareholders’ equity 732,119 663,664 Total liabilities and shareholders’ equity $ 5,893,995 $ 5,572,141 Net interest income, tax equivalent $ 187,134 $ 174,301 Less tax equivalent interest income 1,139 1,191 Net interest income $ 185,995 $ 173,110 Net interest spread 2.35 % 2.43 % Benefit of interest free funding 1.01 0.89 Net interest margin 3.36 % 3.32 % (1) Interest includes fees on loans of $1,998 and $1,770 in 2024 and 2023, respectively.
Income Statement Review (dollars in thousands) Change 2023 vs. 2022 Year Ended December 31 2023 2022 Amount Percent Net interest income $ 173,110 $ 169,102 $ 4,008 2.4 % Provision for credit losses (recovery) 6,811 4,905 1,906 38.9 Noninterest income 57,659 57,916 (257 ) (0.4 ) Noninterest expense 125,390 121,071 4,319 3.6 Income taxes 20,564 19,228 1,336 6.9 Net income $ 78,004 $ 81,814 $ (3,810 ) (4.7 )% Average earning assets $ 5,244,128 $ 5,129,345 $ 114,783 2.2 % Yield on average earnings assets, tax equivalent* 5.15 % 3.87 % 1.28 % 33.1 % Cost of interest bearing funds 2.72 % 0.85 % 1.87 % 220.0 % Net interest margin, tax equivalent* 3.32 % 3.32 % 0.0 % 0.0 % *Yield on average earning assets and net interest margin are computed on a taxable equivalent basis using a 24.95% tax rate. 23 Table of Contents Consolidated Average Balance Sheets and Taxable Equivalent Income/Expense and Yields/Rates 2023 2022 (in thousands) Average Balances Interest Average Rate Average Balances Interest Average Rate Earning assets: Loans (1)(2)(3) $ 3,888,585 $ 231,114 5.94 % $ 3,552,941 $ 169,950 4.78 % Loans held for sale 228 31 13.60 893 94 10.53 Securities: U.S.
Income Statement Review (dollars in thousands) Change 2024 vs. 2023 Year Ended December 31 2024 2023 Amount Percent Net interest income $ 185,995 $ 173,110 $ 12,885 7.4 % Provision for credit losses 10,951 6,811 4,140 60.8 Noninterest income 62,565 57,659 4,906 8.5 Noninterest expense 130,923 125,390 5,533 4.4 Income taxes 23,873 20,564 3,309 16.1 Net income $ 82,813 $ 78,004 $ 4,809 6.2 % Average earning assets $ 5,569,948 $ 5,244,128 $ 325,820 6.2 % Yield on average earnings assets, tax equivalent* 5.65 % 5.15 % 0.50 % 9.8 % Cost of interest bearing funds 3.30 % 2.72 % 0.58 % 21.2 % Net interest margin, tax equivalent* 3.36 % 3.32 % 0.04 % 1.1 % *Yield on average earning assets and net interest margin are computed on a taxable equivalent basis using a 24.95% tax rate. 24 Table of Contents Consolidated Average Balance Sheets and Taxable Equivalent Income/Expense and Yields/Rates 2024 2023 (in thousands) Average Balances Interest Average Rate Average Balances Interest Average Rate Earning assets: Loans (1)(2)(3) $ 4,247,762 $ 274,886 6.47 % $ 3,888,585 $ 231,114 5.94 % Loans held for sale 165 24 14.55 228 31 13.60 Securities: U.S.
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.
These assumptions are uncertain, and as a result, the actual payments will differ from the projection due to changes in economic conditions.
The increase in loans from prior year included a $114.9 million increase in the commercial loan portfolio, a $139.0 million increase in the residential loan portfolio, an $86.1 million increase in the indirect loan portfolio, and a $1.6 million increase in the consumer direct loan portfolio.
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.
Accruing loans 30-89 days past due at $15.3 million were relatively flat to 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 management processes focus on the immediate identification, management, and resolution of problem loans to maximize recovery and minimize loss.
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.
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.
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.
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. The investment portfolio consists of investment grade short-term issues suitable for bank investments.
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.
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.
Allowance for Credit Losses Our reserve coverage (allowance for credit losses to nonperforming loans) at December 31, 2023 was 354.7% compared to 300.4% at December 31, 2022. Nonaccrual loans to total loans at December 31, 2023 was 0.1% compared to 0.2% at December 31, 2022.
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.
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 December 31, 2023 was 13.69%. CTB’s CBLR ratio as of December 31, 2023 was 13.22%.
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%.
At December 31, 2023, available-for-sale (“AFS”) securities comprised all of the total investment portfolio, and the AFS portfolio was approximately 166% of equity capital. Eighty-eight percent of the pledge-eligible portfolio was pledged. Contractual Commitments Our significant contractual obligations and commitments as of December 31, 2023 include debt, lease, and purchase obligations.
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.
Total Change Change Due to (in thousands) 2023/2022 Volume Rate Interest income: Loans $ 61,164 $ 17,147 $ 44,017 Loans held for sale (63 ) (55 ) (8 ) U.S.
Total Change Change Due to (in thousands) 2024/2023 Volume Rate Interest income: Loans $ 43,772 $ 22,314 $ 21,458 Loans held for sale (7 ) (8 ) 1 U.S.
CTBI’s annualized dividend yield to shareholders as of December 31, 2023 was 4.20%. 27 Table of Contents Loans (dollars in thousands) December 31, 2023 Loan Category Balance Variance from Prior Year Net (Charge-Offs)/ Recoveries Nonperforming ACL Commercial: Hotel/motel $ 395,765 15.2 % $ 0 $ 0 $ 4,592 Commercial real estate residential 417,943 12.1 97 1,557 4,285 Commercial real estate nonresidential 778,637 2.1 393 2,950 7,560 Dealer floorplans 70,308 (9.3 ) 0 0 659 Commercial other 321,082 2.8 (1,434 ) 850 3,760 Total commercial 1,983,735 6.1 (944 ) 5,357 20,856 Residential: Real estate mortgage 937,524 13.6 (99 ) 7,298 10,197 Home equity 147,036 22.0 (17 ) 743 1,367 Total residential 1,084,560 14.7 (116 ) 8,041 11,564 Consumer: Consumer direct 159,106 1.0 (237 ) 15 3,261 Consumer indirect 823,505 11.7 (1,952 ) 555 13,862 Total consumer 982,611 9.8 (2,189 ) 570 17,123 Total loans $ 4,050,906 9.2 % $ (3,249 ) $ 13,968 $ 49,543 Total Deposits and Repurchase Agreements (dollars in thousands) 2023 2022 Percent Change Noninterest bearing deposits $ 1,260,690 $ 1,394,915 (9.6 )% Interest bearing deposits Interest checking 123,927 112,265 10.4 % Money market savings 1,525,537 1,348,809 13.1 % Savings accounts 535,063 654,380 (18.2 )% Time deposits 1,279,405 915,774 39.7 % Repurchase agreements 225,245 215,431 4.6 % Total interest bearing deposits and repurchase agreements 3,689,177 3,246,659 13.6 % Total deposits and repurchase agreements $ 4,949,867 $ 4,641,574 6.6 % 28 Table of Contents Average Deposits and Other Borrowed Funds (in thousands) 2023 2022 Deposits: Noninterest bearing deposits $ 1,343,917 $ 1,398,778 Interest bearing deposits 128,061 104,631 Money market accounts 1,407,611 1,248,067 Savings accounts 600,981 667,367 Certificates of deposit of $100,000 or more 572,959 556,849 Certificates of deposit 498,625 470,877 Total deposits 4,552,154 4,446,569 Other borrowed funds: Repurchase agreements and federal funds purchased 219,591 243,102 Advances from Federal Home Loan Bank 18,494 898 Long-term debt 64,351 57,841 Finance lease liability 3,469 1,589 Total other borrowed funds 305,905 303,430 Total deposits and other borrowed funds $ 4,858,059 $ 4,749,999 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.
CTBI’s annualized dividend yield to shareholders as of December 31, 2024 was 3.55%. 27 Table of Contents Loans (dollars in thousands) December 31, 2024 Loan Category Balance Variance from Prior Year Net (Charge-Offs)/ Recoveries Nonperforming ACL Commercial: Hotel/motel $ 458,832 15.9 % $ 0 $ 0 $ 5,208 Commercial real estate residential 508,310 21.6 37 1,617 5,467 Commercial real estate nonresidential 865,031 11.1 77 13,154 10,307 Dealer floorplans 84,956 20.8 0 0 682 Commercial other 355,550 10.7 (976 ) 1,416 3,832 Total commercial 2,272,679 14.6 (862 ) 16,187 25,496 Residential: Real estate mortgage 1,043,401 11.3 (98 ) 8,820 12,504 Home equity 167,425 13.9 (62 ) 648 1,499 Total residential 1,210,826 11.6 (160 ) 9,468 14,003 Consumer: Consumer direct 152,843 (3.9 ) (971 ) 269 2,221 Consumer indirect 850,289 3.3 (3,533 ) 762 13,248 Total consumer 1,003,132 2.1 (4,504 ) 1,031 15,469 Total loans $ 4,486,637 10.8 % $ (5,526 ) $ 26,686 $ 54,968 Total Deposits and Repurchase Agreements (dollars in thousands) 2024 2023 Percent Change Noninterest bearing deposits $ 1,242,676 $ 1,260,690 (1.4 )% Interest bearing deposits Interest checking 167,736 123,927 35.4 Money market savings 1,781,415 1,525,537 16.8 Savings accounts 511,378 535,063 (4.4 ) Time deposits 1,366,984 1,279,405 6.8 Repurchase agreements 240,166 225,245 6.6 Total interest bearing deposits and repurchase agreements 4,067,679 3,689,177 10.3 Total deposits and repurchase agreements $ 5,310,355 $ 4,949,867 7.3 % 28 Table of Contents Average Deposits and Other Borrowed Funds (in thousands) 2024 2023 Deposits: Noninterest bearing deposits $ 1,238,101 $ 1,343,917 Interest bearing deposits 148,025 128,061 Money market accounts 1,636,891 1,407,611 Savings accounts 524,514 600,981 Certificates of deposit of $100,000 or more 707,862 572,959 Certificates of deposit 552,868 498,625 Total deposits 4,808,261 4,552,154 Other borrowed funds: Repurchase agreements and federal funds purchased 229,408 219,591 Advances from Federal Home Loan Bank 597 18,494 Long-term debt 64,129 64,351 Finance lease liability 3,439 3,469 Total other borrowed funds 297,573 305,905 Total deposits and other borrowed funds $ 5,105,834 $ 4,858,059 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.
This discretionary gift/payment was paid on January 19, 2024 to all eligible employees. This payment was accrued as of December 31, 2023 in the amount of $1.2 million. * Please refer to our annual report on Form 10-K for the year ended December 31, 2022 for detailed income discussion related to the year 2021.
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. * Please refer to our annual report on Form 10-K for the year ended December 31, 2023 for detailed income discussion related to the year 2022.
As disclosed in the notes to the consolidated financial statements, we have certain obligations and commitments to make future payments under contracts. 30 Table of Contents As of December 31, 2023, our outstanding balance on long-term debt was $64.2 million, which includes junior subordinated debentures of $57.8 million and loan related borrowings of $6.4 million.
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.
Treasury and agencies 2,670 (2,122 ) 4,792 Tax exempt state and political subdivisions (227 ) (426 ) 199 Other securities 2,898 (440 ) 3,338 Federal Reserve Bank and Federal Home Loan Bank stock 156 (68 ) 224 Federal funds sold (6 ) (6 ) 0 Interest bearing deposits 4,484 (275 ) 4,759 Other investments 0 0 0 Investment in unconsolidated subsidiaries 67 0 67 Total interest income 71,143 13,755 57,388 Interest expense: Savings and demand deposits 35,810 1,007 34,803 Time deposits 21,289 335 20,954 Repurchase agreements and federal funds purchased 6,454 (223 ) 6,677 Advances from Federal Home Loan Bank 984 917 67 Long-term debt 2,314 241 2,073 Finance lease liability 49 67 (18 ) Total interest expense 66,900 2,344 64,556 Net interest income $ 4,243 $ 11,411 $ (7,168 ) For purposes of the above table, changes which are due to both rate and volume are allocated based on a percentage basis, using the absolute values of rate and volume variance as a basis for percentages.
Treasury and agencies (843 ) (1,563 ) 720 Tax exempt state and political subdivisions (167 ) (82 ) (85 ) Other securities (1,467 ) (672 ) (795 ) Federal Reserve Bank and Federal Home Loan Bank stock 24 (50 ) 74 Federal funds sold (8 ) (6 ) (2 ) Interest bearing deposits 3,428 3,333 95 Other investments 6 0 6 Investment in unconsolidated subsidiaries 3 0 3 Total interest income 44,741 23,266 21,475 Interest expense: Savings and demand deposits 10,476 4,430 6,046 Time deposits 20,873 5,740 15,133 Repurchase agreements and federal funds purchased 1,399 415 984 Advances from Federal Home Loan Bank (988 ) (1,295 ) 307 Long-term debt 108 (15 ) 123 Finance lease liability 40 (1 ) 41 Total interest expense 31,908 9,274 22,634 Net interest income $ 12,833 $ 13,992 $ (1,159 ) For purposes of the above table, changes which are due to both rate and volume are allocated based on a percentage basis, using the absolute values of rate and volume variance as a basis for percentages.
For further information regarding nonperforming loans, see note 4 to the consolidated financial statements contained herein. Our level of foreclosed properties at $1.6 million at December 31, 2023 was a decrease of $2.1 million from the $3.7 million at December 31, 2022.
For further information regarding nonperforming loans, see note 4 to the consolidated financial statements contained herein.
Deposits in other banks increased $135.2 million from December 31, 2022. Deposits, including repurchase agreements, at $4.9 billion increased $308.3 million, or 6.6%, from December 31, 2022. Shareholders’ equity at December 31, 2023 of $702.2 million was a $74.2 million, or 11.8%, increase from the $628.0 million at December 31, 2022.
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.
Net unrealized losses on securities, net of tax, were $103.3 million at December 31, 2023, compared to $129.2 million at December 31, 2022. Management has the ability and intent to hold these securities to recovery or maturity.
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.
Our allowance for credit losses to nonaccrual loans at December 31, 2023 was 1,223.9% compared to 674.9% at December 31, 2022. Our credit loss reserve as a percentage of total loans outstanding at December 31, 2023 was 1.22%, a decrease from the 1.24% at December 31, 2022.
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. 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.
Maturity at December 31, 2023 (in thousands) Within one year After one but within five years After five years Total Commercial secured by real estate and commercial other $ 225,512 $ 163,087 $ 1,423,460 $ 1,812,059 Commercial and real estate construction 70,070 23,270 193,066 286,406 $ 295,582 $ 186,357 $ 1,616,526 $ 2,098,465 Rate sensitivity: Predetermined rate $ 52,585 $ 86,552 $ 73,797 $ 212,934 Adjustable rate 242,997 99,805 1,542,729 1,885,531 $ 295,582 $ 186,357 $ 1,616,526 $ 2,098,465 32 Table of Contents Deposit Maturities Maturities and/or repricing of time deposits of $100,000 or more outstanding at December 31, 2023 are summarized as follows: (in thousands) Certificates of Deposit Other Time Deposits Total Three months or less $ 165,959 $ 7,721 $ 173,680 Over three through six months 246,052 24,859 270,911 Over six through twelve months 241,584 18,360 259,944 Over twelve through sixty months 50,627 11,529 62,156 Over sixty 0 0 0 $ 704,222 $ 62,469 $ 766,691 Interest Rate Risk We consider interest rate risk one of our most significant market risks.
Maturity at December 31, 2024 (in thousands) Within one year After one but within five years After five years Total Commercial secured by real estate and commercial other $ 251,366 $ 212,905 $ 1,627,112 $ 2,091,383 Commercial and real estate construction 101,113 16,686 171,633 289,432 $ 352,479 $ 229,591 $ 1,798,745 $ 2,380,815 Rate sensitivity: Predetermined rate $ 56,130 $ 116,139 $ 65,687 $ 237,956 Adjustable rate 296,349 113,452 1,733,058 2,142,859 $ 352,479 $ 229,591 $ 1,798,745 $ 2,380,815 32 Table of Contents Deposit Maturities Maturities and/or repricing of time deposits of $100,000 or more outstanding at December 31, 2024 are summarized as follows: (in thousands) Certificates of Deposit Other Time Deposits Total Three months or less $ 243,698 $ 15,469 $ 259,167 Over three through six months 154,092 19,872 173,964 Over six through twelve months 356,948 21,075 378,023 Over twelve through sixty months 40,881 10,636 51,517 Over sixty 0 0 0 $ 795,619 $ 67,052 $ 862,671 Interest Rate Risk We consider interest rate risk one of our most significant market risks.
Removed
Year over year earnings were impacted by increases in provision for loan losses and noninterest expense and a decrease in noninterest income.
Added
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.
Removed
Income is stated at a fully taxable equivalent basis, using a 24.95% tax rate. 25 Table of Contents Net Interest Income (dollars in thousands) Year Ended December 31 2023 2022 Percent Change Components of net interest income: Income on earning assets $ 268,650 $ 197,742 35.9 % Expense on interest bearing liabilities 95,540 28,640 233.6 % Net interest income 173,110 169,102 2.4 % TEQ 1,191 956 24.6 % Net interest income, tax equivalent $ 174,301 $ 170,058 2.5 % Average yield and rates paid: Earning assets yield 5.15 % 3.87 % 33.1 % Rate paid on interest bearing liabilities 2.72 % 0.85 % 220.0 % Gross interest margin 2.43 % 3.02 % (19.6 )% Net interest margin 3.32 % 3.32 % 0.0 % Average balances: Investment securities $ 1,203,470 $ 1,402,052 (14.2 )% Loans $ 3,888,585 $ 3,552,941 9.4 % Earning assets $ 5,244,128 $ 5,129,345 2.2 % Interest-bearing liabilities $ 3,514,142 $ 3,351,221 4.9 % Net interest income for the year ended December 31, 2023 of $173.1 million increased $4.0 million, or 2.4%, from prior year with an increase in average earning assets for the year 2023 of $114.8 million, or 2.2%.
Added
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.
Removed
See below for discussion of our allowance for credit losses.
Added
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.
Removed
In recognition of our employees’ significant efforts, the Compensation Committee of the Board of Directors authorized a discretionary gift/payment to all full-time employees hired prior to July 1, 2023 of $1000 and all full-time employees hired after June 30, 2023 of $500. The Committee also authorized a discretionary gift/payment to our Executive Committee and other members of senior management.
Added
Income is stated at a fully taxable equivalent basis, using a 24.95% tax rate. 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%.
Removed
Our commercial real estate (“CRE”) non-residential portfolio consisted of 1,763 loans with a total balance of $783.5 million as of December 31, 2023.
Added
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.
Removed
Our CRE office portfolio as of December 31, 2023 consisted of 176 loans with a total balance of $87.3 million, or 10.0% of the total number of CRE non-residential loans and 11.14% of CRE non-residential total dollars outstanding. CTBI’s investment portfolio decreased $91.5 million, or 7.3%, from December 31, 2022.
Added
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 the positive impact to other direct expenses of the accounting method change related to investments in tax credit structures (ASU No. 2023-02).
Removed
Prior year nonperforming loans, as previously reported, exclude troubled debt restructurings (“TDRs”) which have been eliminated in the current period due to implementation of Accounting Standard Update 2022-02. Accruing loans 90+ days past due increased $1.4 million from December 31, 2022, while nonaccrual loans decreased $2.8 million from December 31, 2022.
Added
Management has the ability and intent to hold these securities to recovery or maturity.
Removed
Sales of foreclosed properties for the year ended December 31, 2023 totaled $2.5 million while new foreclosed properties totaled $0.7 million.
Added
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.
Removed
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, 2023 were deposits with the Federal Reserve of $207.6 million, compared to $72.6 million at December 31, 2022.

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