| Loans | Note 4 – Loans Major classifications of loans, net of unearned income, deferred loan origination costs and fees, and net premiums on acquired loans, are summarized
as follows:
(in thousands)
June 30 2023
December 31 2022
Hotel/motel
$
372,981
$
343,640
Commercial real estate residential
393,309
372,914
Commercial real estate nonresidential
787,598
762,349
Dealer floorplans
76,903
77,533
Commercial other
319,838
312,422
Commercial loans
1,950,629
1,868,858
Real estate mortgage
883,104
824,996
Home equity lines
132,033
120,540
Residential loans
1,015,137
945,536
Consumer direct
157,848
157,504
Consumer indirect
806,081
737,392
Consumer loans
963,929
894,896
Loans and lease financing
$
3,929,695
$
3,709,290 The loan portfolios presented above are net of unearned fees and unamortized premiums.
Unearned fees included above totaled $ million as of June
30, 2023 and as of December 31, 2022, while the unamortized premiums on the indirect lending portfolio totaled $ million as of June 30, 2023 and $ million as of December 31, 2022 CTBI has segregated and evaluates our loan portfolio through nine portfolio segments with similar risk characteristics. CTBI serves customers in small and mid-sized communities in eastern, northeastern, central, and south central Kentucky, southern West Virginia, and
northeastern Tennessee. Therefore, CTBI’s exposure to credit risk is significantly affected by changes in these communities. Hotel/motel loans are a significant concentration for CTBI, representing approximately
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. Dealer floorplans consist of loans to dealerships to finance inventory and are collateralized under a blanket security agreement and without
specific liens on individual units. This risk is mitigated by the use of periodic inventory audits. These audits are performed monthly and follow up is required on any out of compliance items identified. These audits are subject to increasing
frequency when fact patterns suggest more scrutiny is required. Commercial other loans consist of agricultural loans, receivable financing, loans to financial institutions, loans for purchasing or carrying
securities, and other commercial purpose loans. Commercial loans are underwritten based on the borrower’s ability to service debt from the business’s underlying cash flows. As a general practice, we obtain collateral such as equipment, or other
assets, although such loans may be uncollateralized but guaranteed. Residential real estate loans are a mixture of fixed rate and adjustable rate first and second lien residential mortgage loans and also include real
estate construction loans which are typically for owner-occupied properties. The terms of the real estate construction loans are generally short-term with permanent financing upon completion. As a policy, CTBI holds adjustable rate loans and
sells the majority of our fixed rate first lien mortgage loans into the secondary market. Changes in interest rates or market conditions may impact a borrower’s ability to meet contractual principal and interest payments. Residential real estate
loans are secured by real property. Home equity lines are primarily revolving adjustable rate credit lines secured by real property. Consumer direct loans are a mixture of fixed rate and adjustable rate products comprised of unsecured loans, consumer revolving credit lines,
deposit secured loans, and all other consumer purpose loans. Consumer indirect loans are primarily fixed rate consumer loans secured by automobiles, trucks, vans, and recreational vehicles originated at the selling dealership
underwritten and purchased by CTBI’s indirect lending department. Both new and used products are financed. Only dealers who have executed dealer agreements with CTBI participate in the indirect lending program. Not included in the loan balances above were loans held for sale in the amount of $0.2 million at June For
periods ended June 30, 2022 and December 31, 2022, CTBI derived our ACL balance by using vintage modeling for the consumer and residential portfolios. Static pool models incorporating losses by credit risk rating were developed to determine
credit loss balances for the commercial loan segments. Qualitative loss factors were based on CTBI’s judgment of delinquency trends, level of nonperforming loans, trend in loan losses, supervision and administration, quality control exceptions,
and reasonable and supportable forecasts based on unemployment rates and industry concentrations. CTBI determined that twelve months represented a reasonable and supportable forecast period and reverted back to a historical loss rate
immediately. CTBI leveraged economic projections from a reputable and independent third party to form its loss driver forecasts over the twelve-month
forecast period. Other internal and external indicators of economic forecasts were also considered by CTBI when developing the forecast metrics. CTBI also had an inherent model risk allocation included in our ACL calculation to allow for
certain known model limitations as well as other potential risks not quantified elsewhere. One limitation was the inability to completely identify revolving line of credit within the commercial other segment. During the quarter ended June 30, 2023,
CTBI implemented third party software for its ACL calculations. During the implementation process, discounted cash flow modeling was chosen for all loan segments. The primary reasons that contributed to this decision were: Discounted cash flow
(“DCF”) models allow for the effective incorporation of a reasonable and supportable forecast in a directionally consistent and objective manner; the analysis aligns well with other calculations outside of the ACL estimation which will mitigate
model risk in other areas; and peer data is available for certain inputs if first -party data is not available or meaningful. This change in modeling resulted in a shift in our reserve estimates as of June 30, 2023 as presented below:
(in thousands)
ACL Software June 30, 2023
CTBI Internal ACL Model June 30, 2023
Change in Allocation
Hotel/motel
$
5,192
$
6,038
$
(846
)
Commercial real estate residential
3,749
4,669
(920
)
Commercial real estate nonresidential
7,797
8,794
(997
)
Dealer floorplans
1,157
1,719
(562
)
Commercial other
6,176
4,547
1,629
Commercial loans reserve allocation
24,071
25,767
(1,696
)
Real estate mortgage
7,884
8,443
(559
)
Home equity lines
1,108
1,065
43
Residential loans reserve allocation
8,992
9,508
(516
)
Consumer direct
2,563
1,673
890
Consumer indirect
12,392
10,959
1,433
Consumer loans reserve allocation
14,955
12,632
2,323
Loans and lease financing allowance for credit loss
$
48,018
47,907 $ 111 This
change in reserve estimates is related to life of loan and how it functions in a cash flow methodology versus the loss rate methodology previously used as consumer loans generally have longer lives than commercial loans. Although commercial
loans may estimate more probability of default/loss given default compared to consumer loans, their shorter exposures will yield lower reserves. Additionally, there was a change in how some of the qualitative factors were applied using the new
software with a switch from a geographical approach to a loan segment approach. The following tables present the balance in the ACL for the periods ended June 30,
2023, December 31, 2022, and June 30, 2022
Three Months Ended June 30, 2023
(in thousands)
Beginning Balance
Provision Charged to Expense
Losses Charged Off
Recoveries
Ending Balance
ACL
Hotel/motel
$
5,287
$
(95
)
$
0
$
0
$
5,192
Commercial real estate residential
5,157
(1,384
)
(28
)
4
3,749
Commercial real estate nonresidential
9,010
(1,393
)
(9
)
189
7,797
Dealer floorplans
1,694
(537
)
0
0
1,157
Commercial other
4,782
2,387
(1,073
)
80
6,176
Real estate mortgage
7,917
10
(55
)
12
7,884
Home equity
1,044
76
(13
)
1
1,108
Consumer direct
1,746
807
(82
)
92
2,563
Consumer indirect
10,046
2,138
(693
)
901
12,392
Total
$
46,683
$
2,009
$
(1,953
)
$
1,279
$
48,018
Six Months Ended June 30, 2023
(in thousands)
Beginning Balance
Provision Charged to Expense
Losses Charged Off
Recoveries
Ending Balance
ACL
Hotel/motel
$
5,171
$
21
$
0
$
0
$
5,192
Commercial real estate residential
4,894
(1,198
)
(28
)
81
3,749
Commercial real estate nonresidential
9,419
(1,946
)
(9
)
333
7,797
Dealer floorplans
1,776
(619
)
0
0
1,157
Commercial other
5,285
1,971
(1,260
)
180
6,176
Real estate mortgage
7,932
31
(95
)
16
7,884
Home equity
1,106
12
(13
)
3
1,108
Consumer direct
1,694
912
(238
)
195
2,563
Consumer indirect
8,704
3,941
(2,075
)
1,822
12,392
Total
$
45,981
$
3,125
$
(3,718
)
$
2,630
$
48,018
Year Ended December 31, 2022
(in thousands)
Beginning Balance
Provision Charged to Expense
Losses Charged Off
Recoveries
Ending Balance
ACL
Hotel/motel
$
5,080
$
307
$
(216
)
$
0
$
5,171
Commercial real estate residential
3,986
951
(92
)
49
4,894
Commercial real estate nonresidential
8,884
(154
)
(46
)
735
9,419
Dealer floorplans
1,436
340
0
0
1,776
Commercial other
4,422
947
(1,082
)
998
5,285
Real estate mortgage
7,637
466
(223
)
52
7,932
Home equity
866
257
(37
)
20
1,106
Consumer direct
1,951
(210
)
(609
)
562
1,694
Consumer indirect
7,494
2,001
(3,041
)
2,250
8,704
Total
$
41,756
$
4,905
$
(5,346
)
$
4,666
$
45,981
Three Months Ended June 30, 2022
(in thousands)
Beginning Balance
Provision Charged to Expense
Losses Charged Off
Recoveries
Ending
ACL
Hotel/motel
$
4,711
$
133
$
0
$
0
$
4,844
Commercial real estate residential
4,070
124
0
6
4,200
Commercial real estate nonresidential
9,169
(223
)
0
22
8,968
Dealer floorplans
1,519
(42
)
0
0
1,477
Commercial other
4,844
(285
)
(187
)
101
4,473
Real estate mortgage
7,662
586
(84
)
15
8,179
Home equity
819
71
(5
)
2
887
Consumer direct
1,787
(65
)
(175
)
74
1,621
Consumer indirect
7,728
(222
)
(377
)
566
7,695
Total
$
42,309
$
77
$
(828
)
$
786
$
42,344
Six Months Ended June 30, 2022
(in thousands)
Beginning Balance
Provision Charged to Expense
Losses Charged Off
Recoveries
Ending Balance
ACL
Hotel/motel
$
5,080
$
(20
)
$
(216
)
$
0
$
4,844
Commercial real estate residential
3,986
234
(31
)
11
4,200
Commercial real estate nonresidential
8,884
(49
)
0
133
8,968
Dealer floorplans
1,436
41
0
0
1,477
Commercial other
4,422
193
(344
)
202
4,473
Real estate mortgage
7,637
683
(177
)
36
8,179
Home equity
866
38
(24
)
7
887
Consumer direct
1,951
(245
)
(345
)
260
1,621
Consumer indirect
7,494
77
(1,011
)
1,135
7,695
Total
$
41,756
$
952
$
(2,148
)
$
1,784
$
42,344 Using the ACL software, forecasts were expanded to include gross domestic product (GDP), retail sales and housing price index considerations. CTBI
leverages economic projections from the Federal Open Market Committee to obtain various forecasts for unemployment rate and gross domestic product, the PNC forecast for the Case-Shiller National Home Price Index, and the Wells Fargo forecast for the
Advanced Retail Sales. CTBI has elected to forecast the first four quarters of the credit loss estimate and revert to a long-run average of each considered economic factor as permitted in ASC 326-20-30-9 over four quarters. All periods during the reasonable and supportable forecast period are utilizing a forecasted probability of default. During the ACL software
implementation, loss driver analysis was performed during which regression models were built relating default rates of the various segments to the economic factors noted above. Historical loss data for both CTBI and segment-specific selected peers
was incorporated from FFIEC call report data. For loss given default, the Frye-Jacobs LGD estimation technique was utilized in the ACL software provided a risk curve that most approximates the asset class under consideration. Management elected to
evaluate internal prepayment experience over a trailing timeframe to determine the appropriate prepayment and curtailment rates to be used in the credit loss estimate. CTBI continues to use management judgement for qualitative loss factors such as delinquency trends, supervision and administration, quality control
exceptions, collateral values, and industry concentrations, although these factors are applied differently in the ACL software. The software allows management to approve a “worst case” scenario or a maximum loss rate for each segment. Qualitative
dollars available for allocation then become the difference between the worst case and the ACL reserve estimate. Each factor is then given a risk weighting that is applied to determine a basis point allocation. The previous model only allowed for a
specific basis point allocation determined by management. In addition to these factors, management has added risk factors related to changes in the nature and volume of the portfolio and terms of loans and changes in the experience, depth, and
ability of lending management. The previous significant event factor has been expanded to reflect changes in international, national, regional and local conditions, as well as the effect of other external factors as noted below. The previous
factors for inherent model risk and levels of nonperforming loans were not incorporated into the ACL software as separate qualitative factors. The revised qualitative loss factors are as follows:
•
Changes in delinquency trends by loan segment
•
Changes in international, national, regional, and local conditions
•
The effect of other external factors (i.e. competition, legal and regulatory requirements) on the level of estimated credit losses
•
The existence and effect of any concentrations of credit and changes in the levels of such concentrations
•
A supervision and administration allocation based on CTBI’s loan review process
•
Exceptions in lending policies and procedures as measured by quarterly loan portfolio exceptions reports
•
Changes in the nature and volume of the portfolio and terms of loans
•
Changes in the experience, depth, and ability of lending management Economic forecast factors utilized in the estimate improved quarter over quarter and the
slight reduction in reserve requirements from 1.24% to 1.22% is reflective of this improvement. Management continues to note the continued impact of global uncertainty, the current rate of inflation, the significant rising rate environment, and the fact that there is
no immediate end foreseen, and these conditions are now part of qualitative factors noted above. As in previous quarters an allocation was made for delinquency trends, industry concentrations, supervisory and administration, loan exceptions, and
collateral values. Our provision for credit losses for the quarter
increased $0.9 million from prior quarter and $1.9 million from prior year same quarter. Refer to Note 1 to the condensed consolidated financial statements for further information regarding our nonaccrual policy. Nonaccrual loans and
loans 90 days past due and still accruing segregated by class of loans for both June 30, 2023 and December 31, 2022 were as follows:
June 30, 2023
(in thousands)
Nonaccrual Loans with No ACL
Nonaccrual Loans with ACL
90+ and Still Accruing
Total Nonperforming Loans
Hotel/motel
$
0
$
0
$
0
$
0
Commercial real estate residential
0
322
712
1,034
Commercial real estate nonresidential
0
982
300
1,282
Commercial other
0
753
277
1,030
Total commercial loans
0
2,057
1,289
3,346
Real estate mortgage
0
3,093
4,206
7,299
Home equity lines
0
195
459
654
Total residential loans
0
3,288
4,665
7,953
Consumer direct
0
0
6
6
Consumer indirect
0
0
439
439
Total consumer loans
0
0
445
445
Loans and lease financing
$
0
$
5,345
$
6,399
$
11,744
December 31, 2022
(in thousands)
Nonaccrual Loans with No ACL
Nonaccrual Loans with ACL
90+ and Still Accruing
Total Nonperforming Loans
Hotel/motel
$
0
$
0
$
0
$
0
Commercial real estate residential
0
355
258
613
Commercial real estate nonresidential
0
1,116
1,947
3,063
Commercial other
0
982
369
1,351
Total commercial loans
0
2,453
2,574
5,027
Real estate mortgage
0
4,069
4,929
8,998
Home equity lines
0
291
487
778
Total residential loans
0
4,360
5,416
9,776
Consumer direct
0
0
41
41
Consumer indirect
0
0
465
465
Total consumer loans
0
0
506
506
Loans and lease financing
$
0
$
6,813
$
8,496
$
15,309 Discussion of the Nonaccrual Policy The accrual of interest income on loans is discontinued when management believes, after
considering economic and business conditions, collateral value, and collection efforts, that the borrower’s financial condition is such that the collection of interest is doubtful. Cash payments received on nonaccrual loans generally are applied
against principal, and interest income is only recorded once principal recovery is reasonably assured. Any loans greater than 90 days
past due must be well secured and in the process of collection to continue accruing interest. See Note 1 to the condensed consolidated financial statements for further discussion on our nonaccrual policy. The following tables present CTBI’s loan portfolio aging analysis, segregated by class, as of June 30, 2023 and December 31, 2022 (includes loans 90 days
past due and still accruing as well):
June 30, 2023
(in thousands)
30-59 Days Past Due
60-89 Days Past Due
90+ Days Past Due
Total Past Due
Current
Total Loans
Hotel/motel
$
0
$
0
$
0
$
0
$
372,981
$
372,981
Commercial real estate residential
152
279
1,000
1,431
391,878
393,309
Commercial real estate nonresidential
1,101
110
940
2,151
785,447
787,598
Dealer floorplans
0
0
0
0
76,903
76,903
Commercial other
1,062
330
694
2,086
317,752
319,838
Total commercial loans
2,315
719
2,634
5,668
1,944,961
1,950,629
Real estate mortgage
1,440
2,528
6,220
10,188
872,916
883,104
Home equity lines
733
435
490
1,658
130,375
132,033
Total residential loans
2,173
2,963
6,710
11,846
1,003,291
1,015,137
Consumer direct
557
95
6
658
157,190
157,848
Consumer indirect
3,147
865
439
4,451
801,630
806,081
Total consumer loans
3,704
960
445
5,109
958,820
963,929
Loans and lease financing
$
8,192
$
4,642
$
9,789
$
22,623
$
3,907,072
$
3,929,695
December 31, 2022
(in thousands)
30-59 Days Past Due
60-89 Days Past Due
90+ Days Past Due
Total Past Due
Current
Total Loans
Hotel/motel
$
0
$
0
$
0
$
0
$
343,640
$
343,640
Commercial real estate residential
602
225
574
1,401
371,513
372,914
Commercial real estate nonresidential
2,549
395
2,611
5,555
756,794
762,349
Dealer floorplans
0
0
0
0
77,533
77,533
Commercial other
1,029
850
496
2,375
310,047
312,422
Total commercial loans
4,180
1,470
3,681
9,331
1,859,527
1,868,858
Real estate mortgage
869
3,402
7,067
11,338
813,658
824,996
Home equity lines
786
44
740
1,570
118,970
120,540
Total residential loans
1,655
3,446
7,807
12,908
932,628
945,536
Consumer direct
555
126
41
722
156,782
157,504
Consumer indirect
4,407
764
465
5,636
731,756
737,392
Total consumer loans
4,962
890
506
6,358
888,538
894,896
Loans and lease financing
$
10,797
$
5,806
$
11,994
$
28,597
$
3,680,693
$
3,709,290 The risk characteristics of CTBI’s material portfolio segments are as follows: Hotel/motel loans are a significant concentration for CTBI, representing approximately 9.5% of total loans. This industry has unique risk characteristics as it is highly susceptible to changes in the domestic and global economic environments, which can cause the
industry to experience substantial volatility. These loans are viewed primarily as cash flow loans and secondarily as loans secured by real estate. Hotel/motel lending typically involves higher loan principal amounts and the repayment of these
loans is generally dependent on the successful operation of the property securing the loan or the business conducted on the property securing the loan. Management monitors and evaluates all commercial real estate loans based on collateral and risk
grade criteria. Commercial construction loans generally are made to customers for the purpose of building income-producing properties, and any hotel/motel construction loan would be included in this segment. Personal guarantees of the principals
are generally required. Such loans are made on a projected cash flow basis and are secured by the project being constructed. Construction loan draw procedures are included in each specific loan agreement, including required documentation items and
inspection requirements. Construction loans may convert to term loans at the end of the construction period, or may be repaid by the take-out commitment from another financing source. If the loan is to convert to a term loan, the repayment ability
is based on the borrower’s projected cash flow. Risk is mitigated during the construction phase by requiring proper documentation and inspections whenever a draw is requested. Commercial real estate residential loans are commercial purpose construction and permanent financed loans for commercial purpose 1-4
family/multi-family properties. All commercial real estate loans are viewed primarily as cash flow loans and secondarily as loans secured by real estate. Management monitors and evaluates all commercial real estate loans based on collateral and
risk grade criteria. Commercial residential construction loans generally are made to customers for the purpose of building income-producing properties. Personal guarantees of the principals are generally required. Such loans are made on a
projected cash flow basis and are secured by the project being constructed. Construction loan draw procedures are included in each specific loan agreement, including required documentation items and inspection requirements. Construction loans may
convert to term loans at the end of the construction period, or may be repaid by the take-out commitment from another financing source. If the loan is to convert to a term loan, the repayment ability is based on the borrower’s projected cash flow.
Risk is mitigated during the construction phase by requiring proper documentation and inspections whenever a draw is requested. Commercial real estate nonresidential loans are secured by nonfarm, nonresidential properties, farmland, and other commercial real estate.
Construction for commercial real estate nonresidential loans are also included in this segment as these loans are generally one loan for construction to permanent financing. All commercial real estate loans are viewed primarily as cash flow loans
and secondarily as loans secured by real estate. Management monitors and evaluates all commercial real estate loans based on collateral and risk grade criteria. Commercial nonresidential construction loans generally are made to customers for the
purpose of building income-producing properties. Personal guarantees of the principals are generally required. Such loans are made on a projected cash flow basis and are secured by the project being constructed. Construction loan draw procedures
are included in each specific loan agreement, including required documentation items and inspection requirements. Construction loans may convert to term loans at the end of the construction period, or may be repaid by the take-out commitment from
another financing source. If the loan is to convert to a term loan, the repayment ability is based on the borrower’s projected cash flow. Risk is mitigated during the construction phase by requiring proper documentation and inspections whenever a
draw is requested. Dealer floorplans are segmented separately as they are a unique product with unique
risk factors. CTBI maintains strict processing procedures over our floorplan product with any exceptions requested by a loan officer approved by the appropriate loan committee and the floorplan manager Commercial other loans are primarily based on the identified cash flows of the borrower and secondarily on the underlying collateral provided by the
borrower. The cash flows of borrowers, however, may not be as expected and the collateral securing these loans may fluctuate in value. Most commercial loans are secured by the assets being financed or other business assets such as accounts
receivable or inventory and may incorporate a personal guarantee; however, some short-term loans may be made on an unsecured basis. In the case of loans secured by accounts receivable, the availability of funds for the repayment of these loans may
be substantially dependent on the ability of the borrower to collect amounts due from our customers. As we underwrite our equipment lease financing in a manner similar to our commercial loan portfolio described below, the risk characteristics for
this portfolio mirror that of the commercial loan portfolio. With respect to residential loans that are secured by 1-4 family residences and are generally owner occupied, CTBI generally establishes a maximum
loan-to-value ratio and requires private mortgage insurance if that ratio is exceeded. Home equity loans are typically secured by a subordinate interest in 1-4 family residences. Residential construction loans are handled through the home mortgage
area of the bank. The repayment ability of the borrower and the maximum loan-to-value ratio are calculated using the normal mortgage lending criteria. Draws are processed based on percentage of completion stages including normal inspection
procedures. Such loans generally convert to term loans after the completion of construction. Consumer loans are secured by consumer assets such as automobiles or recreational vehicles. Some consumer loans are unsecured such as small
installment loans and certain lines of credit. Our determination of a borrower’s ability to repay these loans is primarily dependent on the personal income and credit rating of the borrowers, which can be impacted by economic conditions in their
market areas such as unemployment levels. Repayment can also be impacted by changes in property values on residential properties. Risk is mitigated by the fact that the loans are of smaller individual amounts and spread over a large number of
borrowers. The indirect lending area of the bank is generally responsible for purchasing/funding consumer contracts with new and used automobile dealers. Dealer loan applications are forwarded
to the indirect loan processing area for approval or denial. Loan approvals or denials are based on the creditworthiness and repayment ability of the borrowers, and on the collateral value. The dealers may have limited recourse agreements with
CTB. Credit Quality Indicators: CTBI categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt such as: current
financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. CTBI also considers the fair value of the underlying collateral and the strength and willingness of the
guarantor(s). CTBI analyzes commercial loans individually by classifying the loans as to credit risk. Loans classified as loss, doubtful, substandard, or special mention are reviewed quarterly by CTBI for further deterioration or improvement to
determine if appropriately classified and valued if deemed impaired. All other commercial loan reviews are completed every 12 to 18 months. In addition, during the renewal process of any loan, as well as if a loan becomes past due or if other information becomes available, CTBI
will evaluate the loan grade. CTBI uses the following definitions for risk ratings:
➢
Pass
➢
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, as well as
gross charge-offs year to date, if any, segregated by class of loans and based on last credit decision or year of origination:
June 30, 2023
Term Loans Amortized Cost Basis by Origination Year
(in s)
2023
2022
2021
2020
2019
Prior
Revolving Loans
Total
Hotel/motel
Risk rating:
Pass
$
38,210
$
150,521
$
28,454
$
17,968
$
47,039
$
47,091
$
4,043
$
333,326
Watch
2,949
6,957
8,873
4,709
3,412
3,871 0
30,771
OAEM
0
0
6,971
0
0
1,913
0
8,884
Substandard
0
0
0
0
0
0
0
0
Doubtful
0
0
0
0
0
0
0
0
Total hotel/motel
41,159
157,478
44,298
22,677
50,451
52,875
4,043
372,981
Commercial real estate residential
Risk rating:
Pass
55,238
104,912
104,205
35,701
12,921
41,206
14,132
368,315
Watch
753
1,010
835
1,948
743
7,367
144
12,800
OAEM
0
0
0
0
0
65
0
65
Substandard
286
617
4,295
623
289
6,019
0
12,129
Doubtful
0
0
0
0
0
0
0
0
Total commercial real estate residential
56,277
106,539
109,335
38,272
13,953
54,657
14,276
393,309
Commercial real estate residential current period gross charge-offs 0 0 (28 ) 0 0 0 0 (28 )
Commercial real estate nonresidential
Risk rating:
Pass
81,927
153,561
152,539
79,949
66,557
166,883
25,508
726,924
Watch
300
3,966
6,499
9,716
7,618
6,710
711
35,520
OAEM
2,375
19
0
0
0
74
0
2,468
Substandard
1,370
1,439
2,522
4,543
3,096
9,701
0
22,671
Doubtful
0
0
0
0
0
15
0
15
Total commercial real estate nonresidential
85,972
158,985
161,560
94,208
77,271
183,383
26,219
787,598
Commercial real estate nonresidential current period gross charge-offs 0 0 0 (9 ) 0 0 0 (9 )
Dealer floorplans
Risk rating:
Pass
0
0
0
0
0
0
76,903
76,903
Watch
0
0
0
0
0
0
0
0
OAEM
0
0
0
0
0
0
0
0
Substandard
0
0
0
0
0
0
0
0
Doubtful
0
0
0
0
0
0
0
0
Total dealer floorplans
0
0
0
0
0
0
76,903
76,903
Commercial other
Risk rating:
Pass
41,105
60,219
54,817
31,984
6,523
24,483
78,670
297,801
Watch
541
1,390
980
156
334
771
5,990
10,162
OAEM
0
30
0
0
0
0
30
60
Substandard
466
4,216
4,807
943
219
564
600
11,815
Doubtful
0
0
0
0
0
0
0
0
Total commercial other
42,112
65,855
60,604
33,083
7,076
25,818
85,290
319,838
Commercial other current period gross charge-offs (321 ) (632 ) (154 ) (17 ) (90 ) (46 ) 0 (1,260 )
Commercial loans
Risk rating:
Pass
216,480
469,213
340,015
165,602
133,040
279,663
199,256
1,803,269
Watch
4,543
13,323
17,187
16,529
12,107
18,719
6,845
89,253
OAEM
2,375
49
6,971
0
0
2,052
30
11,477
Substandard
2,122
6,272
11,624
6,109
3,604
16,284
600
46,615
Doubtful
0
0
0
0
0
15
0
15
Total commercial loans
$
225,520
$
488,857
$
375,797
$
188,240
$
148,751
$
316,733
$
206,731
$
1,950,629
Total commercial loans current period gross charge-offs $ (321 ) $ (632 ) $ (182 ) $ (26 ) $ (90 ) $ (46 ) $ 0 $ (1,297 )
December 31, 2022
Term Loans Amortized Cost Basis by Origination Year
(in s)
2022
2021
2020
2019
2018
Prior
Revolving Loans
Total
Hotel/motel
Risk rating:
Pass
$
145,262
$
36,002
$
17,742
$
54,328
$
13,178
$
35,179
$
545
$
302,236
Watch
7,921
8,996
5,523
3,453
0
13,555
0
39,448
OAEM
0
0
0
0
0
1,956
0
1,956
Substandard
0
0
0
0
0
0
0
0
Doubtful
0
0
0
0
0
0
0
0
Total hotel/motel
153,183
44,998
23,265
57,781
13,178
50,690
545
343,640
Commercial real estate residential
Risk rating:
Pass
119,826
110,963
38,423
15,467
10,492
36,307
14,297
345,775
Watch
1,474
898
1,675
848
2,136
7,015
152
14,198
OAEM
0
0
0
39
0
0
29
68
Substandard
182
4,289
1,878
346
3,639
2,539
0
12,873
Doubtful
0
0
0
0
0
0
0
0
Total commercial real estate residential
121,482
116,150
41,976
16,700
16,267
45,861
14,478
372,914
Commercial real estate nonresidential
Risk rating:
Pass
175,220
171,311
80,932
70,848
44,099
137,575
23,166
703,151
Watch
3,331
5,765
10,090
2,178
1,962
10,022
1,550
34,898
OAEM
19
0
0
0
0
90
0
109
Substandard
1,939
2,537
4,877
3,135
508
10,865
25
23,886
Doubtful
0
0
0
0
0
305
0
305
Total commercial real estate nonresidential
180,509
179,613
95,899
76,161
46,569
158,857
24,741
762,349
Dealer floorplans
Risk rating:
Pass
0
0
0
0
0
0
77,153
77,153
Watch
0
0
0
0
0
0
380
380
OAEM
0
0
0
0
0
0
0
0
Substandard
0
0
0 |
