Loans | Note 4 – Loans Major classifications of loans, net of unearned income, deferred loan origination costs and fees, and net premiums on acquired loans, are summarized as follows: (in thousands) June 30 2020 Hotel/motel $ 257,245 Commercial real estate residential 257,517 Commercial real estate nonresidential 772,537 Dealer floorplans 62,909 Commercial other 288,850 Commercial unsecured SBA PPP 266,951 Commercial loans 1,906,009 Real estate mortgage 780,632 Home equity lines 108,531 Residential loans 889,163 Consumer direct 147,284 Consumer indirect 596,314 Consumer loans 743,598 Loans and lease financing $ 3,538,770 (in thousands) December 31 2019 Commercial construction $ 104,809 Commercial secured by real estate 1,169,975 Equipment lease financing 481 Commercial other 389,683 Real estate construction 63,350 Real estate mortgage 733,003 Home equity 111,894 Consumer direct 148,051 Consumer indirect 527,418 Total loans $ 3,248,664 The segments presented for June 30, 2020 reflect the implementation of ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments CTBI has segregated and evaluates its loan portfolio through nine portfolio segments with similar risk characteristics. CTBI serves customers in small and mid-sized communities in eastern, northeastern, central, and south central Kentucky, southern West Virginia, and northeastern Tennessee. Therefore, CTBI’s exposure to credit risk is significantly affected by changes in these communities. Hotel/motel loans are a significant concentration for CTBI, representing approximately of total loans. This industry has unique risk characteristics as it is highly susceptible to changes in the domestic and global economic environments, which can cause the industry to experience substantial volatility. Additionally, any hotel/motel construction loans would be included in this segment as CTBI’s construction loans are primarily completed as loan going from construction to permanent financing. These loans are originated based on the borrower’s ability to service the debt and arily based on the fair value of the underlying collateral. Commercial real estate residential loans are commercial purpose construction and permanent financed loans for commercial purpose - family/multi-family properties. These loans are originated based on the borrower’s ability to service the debt and arily based on the fair value of the underlying collateral. Commercial real estate nonresidential loans are secured by nonfarm, nonresidential properties, farmland, and other commercial real estate. These loans are originated based on the borrower’s ability to service the debt and arily based on the fair value of the underlying collateral. Construction for commercial real estate nonresidential loans are also included in this segment as these loans are generally loan for construction to permanent financing. Prior to the implementation of ASU No. - all commercial real estate loans were segmented together with construction loans presented separately. Dealer floorplans have historically been reviewed by management as a separate segment of the commercial loan portfolio although for SEC reporting they were combined within the commercial other segment. With the implementation of ASU No. 2016-13, CTBI segmented dealer floorplans separately as they are a unique product with unique risk factors. The primary unique factor relevant to dealer floorplans is the ability of the borrower to misappropriate funds provided at the point of sale as their floorplan is collateralized under a blanket security agreement and without specific liens on individual units. This risk is mitigated by the use of periodic inventory audits. These audits are performed monthly and follow up is required on any out of compliance items identified. These audits are subject to increasing frequency when fact patterns suggest more scrutiny is required. Commercial other loans consist of commercial check loans, agricultural loans, receivable financing, loans to financial institutions, loans for purchasing or carrying securities, and other commercial purpose loans. Commercial loans are underwritten based on the borrower’s ability to service debt from the business’s underlying cash flows. As a general practice, we obtain collateral such as equipment, or other assets, although such loans may be uncollateralized but guaranteed. CTBI participated in the Paycheck Protection Program (“PPP”) established by the CARES Act resulting in a new loan segment of unsecured commercial other loans that are one hundred percent guaranteed by the Small Business Administration (“SBA”). These loans, which are subject to forgiveness, have maturities of either two or three to five years, depending on when the loan was made. These loans currently have no allowance for credit losses. Residential real estate loans are a mixture of fixed rate and adjustable rate and lien residential mortgage loans and also include real estate construction loans which are typically for owner-occupied properties. The terms of the real estate construction loans are generally short-term with permanent financing upon completion. As a policy, CTBI holds adjustable rate loans and sells the majority of its fixed rate lien mortgage loans into the ary market. Changes in interest rates or market conditions may impact a borrower’s ability to meet contractual principal and interest payments. Residential real estate loans are secured by real property. Home equity lines are primarily revolving adjustable rate credit lines secured by real property. Consumer direct loans are a mixture of fixed rate and adjustable rate products comprised of unsecured loans, consumer revolving credit lines, deposit secured loans, and all other consumer purpose loans. Consumer indirect loans are fixed rate loans secured by automobiles, trucks, vans, and recreational vehicles originated at the selling dealership underwritten and purchased by CTBI’s indirect lending department. Both new and used products are financed. Only dealers who have executed dealer agreements with CTBI participate in the indirect lending program. Not included in the loan balances above were loans held for sale in the amount of $29.0 million at June 30, 2020 and $1.2 million at December 31, 2019. The following tables present the balance in the allowance for credit losses (“ACL”) for the period ended June 30, 2020 and the balance in the allowance for loan and lease losses (“ALLL”) and the recorded investment in loans based on portfolio segment and impairment method as of December 31, 2019 and June 30, 2019: Three Months Ended June 30, 2020 (in thousands) Hotel/ Motel Commercial Real Estate Residential Commercial Real Estate Nonresidential Dealer Floorplans Commercial Other Real Estate Mortgage Home Equity Consumer Direct Consumer Indirect Total ACL Beginning balance $ 5,922 $ 4,012 $ 11,563 $ 1,713 $ 6,409 $ 7,543 $ 890 $ 2,163 $ 9,230 $ 49,445 Provision charged to expense 210 (544 ) (34 ) (102 ) 204 (112 ) (35 ) (64 ) 428 (49 ) Losses charged off 0 (35 ) (128 ) (26 ) (1,993 ) (119 ) 0 (261 ) (1,247 ) (3,809 ) Recoveries 0 6 7 0 83 24 1 94 832 1,047 Ending balance $ 6,132 $ 3,439 $ 11,408 $ 1,585 $ 4,703 $ 7,336 $ 856 $ 1,932 $ 9,243 $ 46,634 Six Months Ended June 30, 2020 (in thousands) Hotel/ Motel Commercial Real Estate Residential Commercial Real Estate Nonresidential Dealer Floorplans Commercial Other Real Estate Mortgage Home Equity Consumer Direct Consumer Indirect Total ACL Beginning balance, prior to adoption of ASC 326 $ 3,371 $ 3,439 $ 8,515 $ 802 $ 5,556 $ 4,604 $ 897 $ 1,711 $ 6,201 $ 35,096 Impact of adoption of ASC 326 170 (721 ) 119 820 (391 ) 1,893 (75 ) (40 ) 1,265 3,040 Provision charged to expense 2,591 794 2,950 (11 ) 1,637 987 32 673 3,005 12,658 Losses charged off 0 (86 ) (187 ) (26 ) (2,352 ) (179 ) 0 (630 ) (2,764 ) (6,224 ) Recoveries 0 13 11 0 253 31 2 218 1,536 2,064 Ending balance $ 6,132 $ 3,439 $ 11,408 $ 1,585 $ 4,703 $ 7,336 $ 856 $ 1,932 $ 9,243 $ 46,634 Three Months Ended June 30, 2019 (in thousands) Commercial Construction Commercial Secured by Real Estate Equipment Lease Financing Commercial Other Real Estate Construction Real Estate Mortgage Home Equity Consumer Direct Consumer Indirect Total ALLL Beginning balance $ 903 $ 14,800 $ 10 $ 5,217 $ 396 $ 4,053 $ 901 $ 1,635 $ 7,089 $ 35,004 Provision charged to expense (36 ) 533 (3 ) 238 (38 ) 299 65 400 105 1,563 Losses charged off (71 ) (345 ) 0 (824 ) 0 (180 ) (34 ) (331 ) (1,012 ) (2,797 ) Recoveries 3 110 0 258 0 15 1 63 778 1,228 Ending balance $ 799 $ 15,098 $ 7 $ 4,889 $ 358 $ 4,187 $ 933 $ 1,767 $ 6,960 $ 34,998 Ending balance: Individually evaluated for impairment $ 99 $ 594 $ 0 $ 182 $ 0 $ 0 $ 0 $ 0 $ 0 $ 875 Collectively evaluated for impairment $ 700 $ 14,504 $ 7 $ 4,707 $ 358 $ 4,187 $ 933 $ 1,767 $ 6,960 $ 34,123 Loans Ending balance: Individually evaluated for impairment $ 3,487 $ 37,028 $ 0 $ 11,508 $ 0 $ 2,570 $ 0 $ 0 $ 0 $ 54,593 Collectively evaluated for impairment $ 62,284 $ 1,155,740 $ 962 $ 378,540 $ 57,017 $ 720,003 $ 109,831 $ 145,149 $ 508,088 $ 3,137,614 Six Months Ended June 30, 2019 (in thousands) Commercial Construction Commercial Secured by Real Estate Equipment Lease Financing Commercial Other Real Estate Construction Real Estate Mortgage Home Equity Consumer Direct Consumer Indirect Total ALLL Beginning balance $ 862 $ 14,531 $ 12 $ 4,993 $ 512 $ 4,433 $ 841 $ 1,883 $ 7,841 $ 35,908 Provision charged to expense 2 821 (5 ) 619 (154 ) 21 150 281 18 1,753 Losses charged off (71 ) (380 ) 0 (1,065 ) 0 (300 ) (60 ) (577 ) (2,399 ) (4,852 ) Recoveries 6 126 0 342 0 33 2 180 1,500 2,189 Ending balance $ 799 $ 15,098 $ 7 $ 4,889 $ 358 $ 4,187 $ 933 $ 1,767 $ 6,960 $ 34,998 Ending balance: Individually evaluated for impairment $ 99 $ 594 $ 0 $ 182 $ 0 $ 0 $ 0 $ 0 $ 0 $ 875 Collectively evaluated for impairment $ 700 $ 14,504 $ 7 $ 4,707 $ 358 $ 4,187 $ 933 $ 1,767 $ 6,960 $ 34,123 Loans Ending balance: Individually evaluated for impairment $ 3,487 $ 37,028 $ 0 $ 11,508 $ 0 $ 2,570 $ 0 $ 0 $ 0 $ 54,593 Collectively evaluated for impairment $ 62,284 $ 1,155,740 $ 962 $ 378,540 $ 57,017 $ 720,003 $ 109,831 $ 145,149 $ 508,088 $ 3,137,614 December 31, 2019 (in thousands) Commercial Construction Commercial Secured by Real Estate Equipment Lease Financing Commercial Other Real Estate Construction Real Estate Mortgage Home Equity Consumer Direct Consumer Indirect Total ALLL Balance, beginning of year $ 862 $ 14,531 $ 12 $ 4,993 512 $ 4,433 $ 841 $ 1,883 $ 7,841 $ 35,908 Provision charged to expense 497 (137 ) (8 ) 3,032 (40 ) 414 172 528 361 4,819 Losses charged off (72 ) (727 ) 0 (2,179 ) (100 ) (767 ) (139 ) (1,100 ) (4,652 ) (9,736 ) Recoveries 12 358 0 509 0 152 23 400 2,651 4,105 Balance, end of year $ 1,299 $ 14,025 $ 4 $ 6,355 $ 372 $ 4,232 $ 897 $ 1,711 $ 6,201 35,096 Ending balance: Individually evaluated for impairment $ 99 $ 227 $ 0 $ 886 $ 0 $ 0 $ 0 $ 0 $ 0 $ 1,212 Collectively evaluated for impairment $ 1,200 $ 13,798 $ 4 $ 5,469 $ 372 $ 4,232 $ 897 $ 1,711 $ 6,201 $ 33,884 Loans Ending balance: Individually evaluated for impairment $ 3,010 $ 41,379 $ 0 $ 11,073 $ 0 $ 2,309 $ 0 $ 0 $ 0 $ 57,771 Collectively evaluated for impairment $ 101,799 $ 1,128,596 $ 481 $ 378,610 $ 63,350 $ 730,694 $ 111,894 $ 148,051 $ 527,418 $ 3,190,893 CTBI derived its ACL balance by using vintage modeling for the consumer and residential portfolios. Static pool models incorporating losses by credit risk rating were developed to determine credit loss balances for the commercial loan segments. Qualitative loss factors are based on CTBI's judgment of delinquency trends, level of nonperforming loans, trend in loan losses, supervision and administration, quality control exceptions, and reasonable and supportable forecasts based on unemployment rates and industry concentrations. CTBI has determined that twelve months represents a reasonable and supportable forecast period and reverts back to a historical loss rate immediately. CTBI leverages economic projections from a reputable and independent third party to form its loss driver forecasts over the twelve month forecast period. Other internal and external indicators of economic forecasts are also considered by CTBI when developing the forecast metrics. CTBI also has an inherent model risk allocation included in its ACL calculation to allow for certain known model limitations as well as other potential risks not quantified elsewhere. Management has identified the following known model limitations and made adjustments through this portion of the calculation for them: (1) The inability to completely identify revolving lines of credit within the commercial other segment. Management had to make assumptions regarding commercial renewals as those renewals are not tracked well by its loan system. (2) The inability within the model to estimate the value of modifications made under troubled debt restructurings. Management has manually calculated the estimated impact based on research of modified terms for troubled debt restructurings. Also included in inherent model risk at implementation was the estimated allowance for previously impaired loans that had not been changed on CTBI’s loan system. There were certain loans that met the definition of impaired previously that management did not consider to have significantly different risk characteristics based on the ACL methodology and segmentation, and therefore determined they would no longer require individual analysis. The inherent model risk factor was decreased by $1.6 million in the first quarter 2020 as formerly impaired loans that are no longer individually analyzed were reassigned and returned to the appropriate loan segments where the historical loss and other qualitative factors were applied. As of June 30, 2020, CTBI’s ACL declined by $ million or basis points compared to March 31, 2020. The decline was primarily in the specific reserves allocated to individually evaluated loans. The decline in ACL as a percentage of loans was also driven by the large growth in PPP loans during the quarter totaling $ million as of June 30, 2020. These loans were added as a segment and, as they are SBA guaranteed, these loans were provided no allowance for credit losses. Refer to Note 1 to the condensed consolidated financial statements for further information regarding our nonaccrual policy. Nonaccrual loans segregated by class of loans and loans 90 days past due and still accruing segregated by class of loans were as follows: June 30, 2020 (in thousands) Nonaccrual Loans with No ACL Nonaccrual Loan with ACL 90+ and Still Accruing Total Nonperforming Loans Hotel/motel $ 0 $ 0 $ 132 $ 132 Commercial real estate residential 1,809 1,506 5,799 9,114 Commercial real estate nonresidential 0 2,833 10,276 13,109 Commercial other 1,259 689 352 2,300 Total commercial loans 3,068 5,028 16,559 24,655 Real estate mortgage 0 5,296 4,140 9,436 Home equity lines 0 691 482 1,173 Total residential loans 0 5,987 4,622 10,609 Consumer direct 0 275 97 372 Consumer indirect 0 0 521 521 Total consumer loans 0 275 618 893 Loans and lease financing $ 3,068 $ 11,290 $ 21,799 $ 36,157 (in thousands) December 31 2019 Commercial: Commercial construction $ 230 Commercial secured by real estate 3,759 Commercial other 3,839 Residential: Real estate construction 634 Real estate mortgage 4,821 Home equity 716 Total nonaccrual loans $ 13,999 The following tables present CTBI’s loan portfolio aging analysis, segregated by class, as of June 30, 2020 and December 31, 2019: June 30, 2020 (in thousands) 30-59 Days Past Due 60-89 Days Past Due 90+ Days Past Due Total Past Due Current Total Loans Hotel/motel $ 0 $ 0 $ 132 $ 132 $ 257,113 $ 257,245 Commercial real estate residential 881 90 7,205 8,176 249,341 257,517 Commercial real estate nonresidential 2,810 420 12,011 15,241 757,296 772,537 Dealer floorplans 0 0 0 0 62,909 62,909 Commercial other 471 417 2,110 2,998 285,852 288,850 Commercial unsecured SBA PPP 0 0 0 0 266,951 266,951 Total commercial loans 4,162 927 21,458 26,547 1,879,462 1,906,009 Real estate mortgage 1,595 3,825 6,071 11,491 769,141 780,632 Home equity lines 717 431 787 1,935 106,596 108,531 Total residential loans 2,312 4,256 6,858 13,426 875,737 889,163 Consumer direct 360 116 372 848 146,436 147,284 Consumer indirect 1,935 497 521 2,953 593,361 596,314 Total consumer loans 2,295 613 893 3,801 739,797 743,598 Loans and lease financing $ 8,769 $ 5,796 $ 29,209 $ 43,774 $ 3,494,996 $ 3,538,770 December 31, 2019 (in thousands) 30-59 Days Past Due 60-89 Days Past Due 90+ Days Past Due Total Past Due Current Total Loans 90+ and Accruing* Commercial: Commercial construction $ 118 $ 0 $ 467 $ 585 $ 104,224 $ 104,809 $ 237 Commercial secured by real estate 2,734 5,969 12,366 21,069 1,148,906 1,169,975 8,820 Equipment lease financing 0 0 0 0 481 481 0 Commercial other 880 284 6,267 7,431 382,252 389,683 2,586 Residential: Real estate construction 117 52 634 803 62,547 63,350 0 Real estate mortgage 774 5,376 10,320 16,470 716,533 733,003 7,088 Home equity 1,084 412 736 2,232 109,662 111,894 344 Consumer: Consumer direct 945 230 97 1,272 146,779 148,051 97 Consumer indirect 4,037 909 447 5,393 522,025 527,418 448 Loans and lease financing $ 10,689 $ 13,232 $ 31,334 $ 55,255 $ 3,193,409 $ 3,248,664 $ 19,620 *90+ and Accruing are also included in 90+ Days Past Due column. The risk characteristics of CTBI’s material portfolio segments are as follows: Hotel/motel loans are a significant concentration for CTBI, representing approximately 7.3% of total loans. This industry has unique risk characteristics as it is highly susceptible to changes in the domestic and global economic environments, which can cause the industry to experience substantial volatility. These loans are viewed primarily as cash flow loans and secondarily as loans secured by real estate. Hotel/motel lending typically involves higher loan principal amounts and the repayment of these loans is generally dependent on the successful operation of the property securing the loan or the business conducted on the property securing the loan. Management monitors and evaluates all commercial real estate loans based on collateral and risk grade criteria. Commercial construction loans generally are made to customers for the purpose of building income-producing properties, and any hotel/motel construction loan would be included in this segment. Personal guarantees of the principals are generally required. Such loans are made on a projected cash flow basis and are secured by the project being constructed. Construction loan draw procedures are included in each specific loan agreement, including required documentation items and inspection requirements. Construction loans may convert to term loans at the end of the construction period, or may be repaid by the take-out commitment from another financing source. If the loan is to convert to a term loan, the repayment ability is based on the borrower’s projected cash flow. Risk is mitigated during the construction phase by requiring proper documentation and inspections whenever a draw is requested. Loans in amounts greater than $500,000 generally require a performance bond to be posted by the general contractor to assure completion of the project. Commercial real estate residential loans are commercial purpose construction and permanent financed loans for commercial purpose 1-4 family/multi-family properties. All commercial real estate loans are viewed primarily as cash flow loans and secondarily as loans secured by real estate. Management monitors and evaluates all commercial real estate loans based on collateral and risk grade criteria. Commercial residential construction loans generally are made to customers for the purpose of building income-producing properties. Personal guarantees of the principals are generally required. Such loans are made on a projected cash flow basis and are secured by the project being constructed. Construction loan draw procedures are included in each specific loan agreement, including required documentation items and inspection requirements. Construction loans may convert to term loans at the end of the construction period, or may be repaid by the take-out commitment from another financing source. If the loan is to convert to a term loan, the repayment ability is based on the borrower’s projected cash flow. Risk is mitigated during the construction phase by requiring proper documentation and inspections whenever a draw is requested. Loans in amounts greater than $500,000 generally require a performance bond to be posted by the general contractor to assure completion of the project. Commercial real estate nonresidential loans are secured by nonfarm, nonresidential properties, farmland, and other commercial real estate. Construction for commercial real estate nonresidential loans are also included in this segment as these loans are generally one loan for construction to permanent financing. All commercial real estate loans are viewed primarily as cash flow loans and secondarily as loans secured by real estate. Management monitors and evaluates all commercial real estate loans based on collateral and risk grade criteria. Commercial nonresidential construction loans generally are made to customers for the purpose of building income-producing properties. Personal guarantees of the principals are generally required. Such loans are made on a projected cash flow basis and are secured by the project being constructed. Construction loan draw procedures are included in each specific loan agreement, including required documentation items and inspection requirements. Construction loans may convert to term loans at the end of the construction period, or may be repaid by the take-out commitment from another financing source. If the loan is to convert to a term loan, the repayment ability is based on the borrower’s projected cash flow. Risk is mitigated during the construction phase by requiring proper documentation and inspections whenever a draw is requested. Loans in amounts greater than $500,000 generally require a performance bond to be posted by the general contractor to assure completion of the project. Prior to the implementation of ASU No. 2016-13, all commercial real estate loans were segmented together with construction loans presented separately. Dealer floorplans have historically been reviewed by management as a separate segment of the commercial loan portfolio although for SEC reporting they were combined within the commercial other segment. With the implementation of ASU No. 2016-13, CTBI segmented dealer floorplans separately as they are a unique product with unique risk factors. CTBI maintains strict processing procedures over its floorplan product with any exceptions requested by a loan officer approved by the appropriate loan committee and the floorplan manager. Commercial other loans are primarily based on the identified cash flows of the borrower and secondarily on the underlying collateral provided by the borrower. The cash flows of borrowers, however, may not be as expected and the collateral securing these loans may fluctuate in value. Most commercial loans are secured by the assets being financed or other business assets such as accounts receivable or inventory and may incorporate a personal guarantee; however, some short-term loans may be made on an unsecured basis. In the case of loans secured by accounts receivable, the availability of funds for the repayment of these loans may be substantially dependent on the ability of the borrower to collect amounts due from its customers. As we underwrite our equipment lease financing in a manner similar to our commercial loan portfolio described below, the risk characteristics for this portfolio mirror that of the commercial loan portfolio. CTBI’s participation in the CARES Act PPP loan program has resulted in a new loan segment of unsecured commercial other loans that are one hundred percent SBA guaranteed. These loans, which are subject to forgiveness, have maturities of either two or three to five years, depending on when the loans was made. These loans currently have no allowance for credit losses. With respect to residential loans that are secured by 1-4 family residences and are generally owner occupied, CTBI generally establishes a maximum loan-to-value ratio and requires private mortgage insurance if that ratio is exceeded. Home equity loans are typically secured by a subordinate interest in 1-4 family residences. Residential construction loans are handled through the home mortgage area of the bank. The repayment ability of the borrower and the maximum loan-to-value ratio are calculated using the normal mortgage lending criteria. Draws are processed based on percentage of completion stages including normal inspection procedures. Such loans generally convert to term loans after the completion of construction. Consumer loans are secured by consumer assets such as automobiles or recreational vehicles. Some consumer loans are unsecured such as small installment loans and certain lines of credit. Our determination of a borrower’s ability to repay these loans is primarily dependent on the personal income and credit rating of the borrowers, which can be impacted by economic conditions in their market areas such as unemployment levels. Repayment can also be impacted by changes in property values on residential properties. Risk is mitigated by the fact that the loans are of smaller individual amounts and spread over a large number of borrowers. The indirect lending area of the bank generally deals with purchasing/funding consumer contracts with new and used automobile dealers. The dealers generate consumer loan applications which are forwarded to the indirect loan processing area for approval or denial. Loan approvals or denials are based on the creditworthiness and repayment ability of the borrower, and on the collateral value. The dealers may have limited recourse agreements with CTB. Credit Quality Indicators: CTBI categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. CTBI also considers the fair value of the underlying collateral and the strength and willingness of the guarantor(s). CTBI analyzes commercial loans individually by classifying the loans as to credit risk. Loans classified as loss, doubtful, substandard, or special mention are reviewed quarterly by CTBI for further deterioration or improvement to determine if appropriately classified and valued if deemed impaired. All other commercial loan reviews are completed every 12 to 18 months. In addition, during the renewal process of any loan, as well as if a loan becomes past due or if other information becomes available, CTBI will evaluate the loan grade. CTBI uses the following definitions for risk ratings: ➢ Pass ➢ Watch ➢ Other assets especially mentioned (OAEM) ➢ Substandard ➢ Doubtful The following tables present the credit risk profile of CTBI’s commercial loan portfolio based on rating category and payment activity, segregated by class of loans and based on last credit decision or year of origination: Term Loans Amortized Cost Basis by Origination Year (in s) 2020 2019 2018 2017 2016 Prior Revolving Loans Total Hotel/motel Risk rating: Pass/watch $ 15,859 $ 76,877 $ 42,255 $ 52,058 $ 24,211 $ 30,357 $ 29 $ 241,646 OAEM 0 0 0 0 0 0 0 0 Substandard 0 0 132 1,113 9,092 5,262 0 15,599 Doubtful 0 0 0 0 0 0 0 0 Total hotel/motel $ 15,859 $ 76,877 $ 42,387 $ 53,171 $ 33,303 $ 35,619 $ 29 $ 257,245 Commercial real estate residential Risk rating: Pass/watch $ 32,631 $ 47,427 $ 34,918 $ 22,779 $ 29,690 $ 59,271 $ 10,720 $ 237,436 OAEM 60 1,562 667 957 453 60 450 4,209 Substandard 2,124 2,210 2,283 4,166 1,198 3,783 108 15,872 Doubtful 0 0 0 0 0 0 0 0 Total commercial real estate residential $ 34,815 $ 51,199 $ 37,868 $ 27,902 $ 31,341 $ 63,114 $ 11,278 $ 257,517 Commercial real estate nonresidential Risk rating: Pass/watch $ 82,320 $ 118,631 $ 95,212 $ 94,677 $ 111,700 $ 207,042 $ 24,821 $ 734,403 OAEM 0 511 70 2 0 3,327 20 3,930 Substandard 3,676 7,132 1,697 2,881 1,513 16,874 401 34,174 Doubtful 0 0 0 0 0 30 0 30 Total commercial real estate nonresidential $ 85,996 $ 126,274 $ 96,979 $ 97,560 $ 113,213 $ 227,273 $ 25,242 $ 772,537 Dealer floorplans Risk rating: Pass/watch $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 62,909 $ 62,909 OAEM 0 0 0 0 0 0 0 0 Substandard 0 0 0 0 0 0 0 0 Doubtful 0 0 0 0 0 0 0 0 Total dealer floorplans $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 62,909 $ 62,909 Commercial other Risk rating: Pass/watch $ 61,504 $ 39,977 $ 37,488 $ 18,186 $ 8,921 $ 28,486 $ 81,263 $ 275,825 OAEM 0 0 5,129 250 477 26 0 5,882 Substandard 2,139 1,819 372 504 1,719 499 91 7,143 Doubtful 0 0 0 0 0 0 0 0 Total commercial other $ 63,643 $ 41,796 $ 42,989 $ 18,940 $ 11,117 $ 29,011 $ 81,354 $ 288,850 Commercial unsecured SBA PPP Risk rating: Pass/watch $ 266,951 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 266,951 OAEM 0 0 0 0 0 0 0 0 Substandard 0 0 0 0 0 0 0 0 Doubtful 0 0 0 0 0 0 0 0 Total commercial unsecured SBA PPP $ 266,951 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 266,951 Commercial loans Risk rating: Pass/watch $ 459,265 $ 282,912 $ 209,873 $ 187,700 $ 174,522 $ 325,156 $ 179,742 $ 1,819,170 OAEM 60 2,073 5,866 1,209 930 3,413 470 14,021 Substandard 7,939 11,161 4,484 8,664 13,522 26,418 600 72,788 Doubtful 0 0 0 0 0 30 0 30 Total commercial loans $ 467,264 $ 296,146 $ 220,223 $ 197,573 $ 188,974 $ 355,017 $ 180,812 $ 1,906,009 (in thousands) Commercial Construction Commercial Secured by Real Estate Equipment Leases Commercial Other Total December 31, 2019 Pass $ 98,102 $ 1,036,573 $ 481 $ 358,203 $ 1,493,359 Watch 3,595 54,338 0 13,618 71,551 OAEM 254 27,964 0 6,065 34,283 Substandard 2,858 51,068 0 11,737 65,663 Doubtful 0 32 0 60 92 Total $ 104,809 $ 1,169,975 $ 481 $ 389,683 $ 1,664,948 The following tables present the credit risk profile of CTBI’s residential real estate and consumer loan portfolios based on performing or nonperforming status, segregated by class: Term Loans Amortized Cost Basis by Origination Year 2020 2019 2018 2017 2016 Prior Revolving Loans Total Home equity lines Performing $ 0 $ 0 $ 0 $ 0 $ 7 $ 12,086 $ 95,265 $ 107,358 Nonperforming 0 0 0 0 0 757 416 1,173 Total home equity lines $ 0 $ 0 $ 0 $ 0 $ 7 $ 12,843 $ 95,681 $ 108,531 Mortgage loans Performing $ 85,015 $ 148,158 $ 78,460 $ 78,334 $ 62,805 $ 318,424 $ 0 $ 771,196 Nonperforming 0 418 448 400 409 7,761 0 9,436 Total mortgage loans $ 85,015 $ 148,576 $ 78,908 $ 78,734 $ 63,214 $ 326,185 $ 0 $ 780,632 Residential loans Performing $ 85,015 $ 148,158 $ 78,460 $ 78,334 $ 62,812 $ 330,510 $ 95,265 $ 878,554 Nonperforming 0 418 448 400 409 8,518 416 10,609 Total residential loans $ 85,015 $ 148,576 $ 78,908 $ 78,734 $ 63,221 $ 339,028 $ 95,681 $ 889,163 Consumer direct loans Performing $ 37,707 $ 46,038 $ 26,068 $ 12,897 $ 8,888 $ 15,314 $ 0 $ 146,912 Nonperforming 0 15 3 0 0 354 0 372 Total consumer direct loans $ 37,707 $ 46,053 $ 26,071 $ 12,897 $ 8,888 $ 15,668 $ 0 $ 147,284 Consumer indirect loans Performing $ 181,015 $ 164,703 $ 129,347 $ 69,555 $ 35,154 $ 16,019 $ 0 $ 595,793 Nonperforming 0 217 170 74 21 39 0 521 Total consumer indirect loans $ 181,015 $ 164,920 $ 129,517 $ 69,629 $ 35,175 $ 16,058 $ 0 $ 596,314 Consumer loans Performing $ 218,722 $ 210,741 $ 155,415 $ 82,452 $ 44,042 $ 31,333 $ 0 $ 742,705 Nonperforming 0 232 173 74 21 393 0 893 Total consumer loans $ 218,722 $ 210,973 $ 155,588 $ 82,526 $ 44,063 $ 31,726 $ 0 $ 743,598 (in thousands) Real Estate Construction Real Estate Mortgage Home Equity Consumer Direct Consumer Indirect Total December 31, 2019 Performing $ 62,716 $ 721,094 $ 110,834 $ 147,954 $ 526,970 $ 1,569,568 Nonperforming 634 11,909 1,060 97 448 14,148 Total $ 63,350 $ 733,003 $ 111,894 $ 148,051 $ 527,418 $ 1,583,716 A loan is considered nonperforming if it is days or more past due and/or on nonaccrual. The total of consumer mortgage loans secured by real estate properties for which formal foreclosure proceedings are in process totaled $2.4 million at June 30, 2020 and December 31, 2019. In accordance with ASC 326-20-30-2, if a loan does not share risk characteristics with other pooled loans in determining the allowance for credit losses, the loan shall be evaluated for expected credit losses on an individual basis. Of the loans that CTBI has individually evaluated, the loans listed below by segment are those that are collateral dependent: June 30, 2020 (in thousands) Number of Lo |