(in thousands)	March 31 2012		December 31 2011
Commercial construction	$	114,161	$	120,577
Commercial secured by real estate		806,909		798,887
Equipment lease financing		8,219		9,706
Commercial other		381,946		374,597
Real estate construction		52,558		53,534
Real estate mortgage		648,338		650,075
Home equity		83,498		84,841
Consumer direct		121,645		123,949
Consumer indirect		324,894		340,382
Total loans	$	2,542,168	$	2,556,548

CTBI has segregated and evaluates its loan portfolio through nine portfolio classes. The nine classes are commercial construction, commercial secured by real estate, equipment lease financing, commercial other, real estate construction, real estate mortgage, home equity, consumer direct, and consumer indirect. 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.

Commercial construction loans are for the purpose of erecting or rehabilitating buildings or other structures for commercial purposes, including any infrastructure necessary for development. Included in this category are improved property, land development, and tract development loans. The terms of these loans are generally short-term with permanent financing upon completion.

Commercial real estate loans include loans secured by nonfarm, nonresidential properties, 1-4 family/ multi-family properties, farmland, and other commercial real estate. These loans are originated based on the borrower's ability to service the debt and secondarily based on the fair value of the underlying collateral.

Commercial other loans consist of commercial check loans, agricultural loans, receivable financing, floorplans, 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 real estate, 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. As a policy, CTBI holds adjustable rate loans and sells the majority of its 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.

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 $1.6 million at March 31, 2012 and $0.5 million at December 31, 2011. The amount of capitalized fees and costs under ASC 310-20, included in the above loan totals were $0.5 million and $0.7 million at March 31, 2012 and December 31, 2011, respectively.

CTBI acquired loans through the acquisition of First National Bank of LaFollette in the fourth quarter 2010. At acquisition, the transferred loans with evidence of deterioration of credit quality since origination were not significant; therefore, none of the loans acquired were accounted for under the guidance in ASC 310-30.

Credit discounts representing principal losses expected over the life of the loans are a component of the initial fair value for purchased loans acquired that are not deemed impaired at acquisition. Accordingly, an allowance for credit losses related to these loans is not carried over and recorded at the acquisition date. Subsequent to the acquisition date, the methods used to estimate the required allowance for credit losses for these loans is similar to originated loans; however, CTBI records a provision for loan losses only when the required allowance exceeds any remaining credit discounts. The remaining difference between the purchase price and the unpaid principal balance at the date of acquisition is recorded in interest income over the life of the loans. Management estimated the cash flows expected to be collected at acquisition using a third party that incorporated estimates of current key assumptions, such as default rates, severity, and prepayment speeds. The carrying amounts of those loans included in the balance sheet are $83.6 million and $88.5 million at March 31, 2012 and December 31, 2011, respectively.

(in thousands)	March 31 2012		December 31 2011
Commercial:
Commercial construction	$	7,246	$	7,029
Commercial secured by real estate		7,440		9,810
Commercial other		3,300		3,914

Residential:
Real estate construction		397		607
Real estate mortgage		3,184		4,204
Home equity		202		189
Total nonaccrual loans	$	21,769	$	25,753

	March 31, 2012
(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	$	825	$	0	$	9,859	$	10,684	$	103,477	$	114,161	$	2,911
Commercial secured by real estate		3,588		1,390		12,480		17,458		789,451		806,909		5,191
Equipment lease financing		0		0		0		0		8,219		8,219		0
Commercial other		1,233		4,124		3,331		8,688		373,258		381,946		881
Residential:
Real estate construction		460		12		480		952		51,606		52,558		84
Real estate mortgage		1,844		2,908		6,153		10,905		637,433		648,338		3,110
Home equity		459		117		588		1,164		82,334		83,498		406
Consumer:
Consumer direct		693		129		36		858		120,787		121,645		36
Consumer indirect		1,721		495		209		2,425		322,469		324,894		209
Total	$	10,823	$	9,175	$	33,136	$	53,134	$	2,489,034	$	2,542,168	$	12,828

	December 31, 2011
(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	$	362	$	33	$	10,171	$	10,566	$	110,011	$	120,577	$	3,292
Commercial secured by real estate		4,566		2,978		11,998		19,542		779,345		798,887		3,969
Equipment lease financing		0		0		0		0		9,706		9,706		0
Commercial other		2,286		688		2,504		5,478		369,119		374,597		619
Residential:
Real estate construction		305		91		622		1,018		52,516		53,534		16
Real estate mortgage		2,067		4,974		6,547		13,588		636,487		650,075		2,719
Home equity		968		312		482		1,762		83,079		84,841		346
Consumer:
Consumer direct		1,723		171		71		1,965		121,984		123,949		71
Consumer indirect		2,684		755		483		3,922		336,460		340,382		483
Total	$	14,961	$	10,002	$	32,878	$	57,841	$	2,498,707	$	2,556,548	$	11,515

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:

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Pass grades include investment grade, low risk, moderate risk, and acceptable risk loans. The loans range from loans that have no chance of resulting in a loss to loans that have a limited chance of resulting in a loss. Customers in this grade have excellent to fair credit ratings. The cash flows are adequate to meet required debt repayments.

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Watch graded loans are loans that warrant extra management attention but are not currently criticized. Loans on the watch list may be potential troubled credits or may warrant "watch" status for a reason not directly related to the asset quality of the credit. The watch grade is a management tool to identify credits which may be candidates for future classification or may temporarily warrant extra management monitoring.

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Other assets especially mentioned (OAEM) reflects loans that are currently protected but are potentially weak. These loans constitute an undue and unwarranted credit risk but not to the point of justifying a classification of substandard. The credit risk may be relatively minor yet constitute an unwarranted risk in light of circumstances surrounding a specific asset. Loans in this grade display potential weaknesses which may, if unchecked or uncorrected, inadequately protect CTBI's credit position at some future date. The loans may be adversely affected by economic or market conditions.

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Substandard grading indicates that the loan is inadequately protected by the current sound worth and paying capacity of the obligor or of the collateral pledged. These loans have a well-defined weakness or weaknesses that jeopardize the orderly liquidation of the debt with the distinct possibility that CTBI will sustain some loss if the deficiencies are not corrected.

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Doubtful graded loans have the weaknesses inherent in the substandard grading with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable. The probability of loss is extremely high, but because of certain important and reasonably specific pending factors which may work to CTBI's advantage or strengthen the asset(s), its classification as an estimated loss is deferred until its more exact status may be determined. Pending factors include proposed merger, acquisition, or liquidation procedures, capital injection, perfecting liens on additional collateral, and refinancing plans.

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A loss grading applies to loans that are considered uncollectible and of such little value that their continuance as bankable assets is not warranted. This classification does not mean that the asset has absolutely no recovery value, but rather it is not practical or desirable to defer writing off the asset. Losses must be taken in the period in which they surface as uncollectible, or in the case of collateral-dependent loans, a specific reserve in the amount of the expected loss is applied to the loan until the collateral is liquidated or we have taken possession and moved it into other real estate owned.

(in thousands)	Commercial Construction		Commercial Secured by Real Estate		Commercial Other		Equipment Leases		Total
March 31, 2012
Pass	$	81,848	$	659,812	$	322,849	$	8,219	$	1,072,728
Watch		14,948		76,821		39,855		0		131,624
OAEM		1,435		19,262		8,662		0		29,359
Substandard		8,793		43,596		7,309		0		59,698
Doubtful		7,137		7,418		3,271		0		17,826
Loss		0		0		0		0		0
Total	$	114,161	$	806,909	$	381,946	$	8,219	$	1,311,235

December 31, 2011
Pass	$	85,886	$	643,312	$	323,471	$	9,706	$	1,062,375
Watch		17,721		78,611		38,185		0		134,517
OAEM		1,379		21,087		1,668		0		24,134
Substandard		8,783		46,238		7,364		0		62,385
Doubtful		6,808		9,639		3,909		0		20,356
Loss		0		0		0		0		0
Total	$	120,577	$	798,887	$	374,597	$	9,706	$	1,303,767

(in thousands)	Real Estate Construction		Real Estate Mortgage		Home Equity		Consumer Direct		Consumer Indirect		Total
March 31, 2012
Performing	$	52,077	$	642,044	$	82,890	$	121,609	$	324,685	$	1,223,305
Nonperforming (1)		481		6,294		608		36		209		7,628
Total	$	52,558	$	648,338	$	83,498	$	121,645	$	324,894	$	1,230,933

December 31, 2011
Performing	$	52,911	$	643,152	$	84,306	$	123,878	$	339,899	$	1,244,146
Nonperforming (1)		623		6,923		535		71		483		8,635
Total	$	53,534	$	650,075	$	84,841	$	123,949	$	340,382	$	1,252,781

A loan is considered impaired, in accordance with the impairment accounting guidance (ASC 310-10-35-16), when based on current information and events, it is probable CTBI will be unable to collect all amounts due from the borrower in accordance with the contractual terms of the loan. Impaired loans include nonperforming commercial loans but also include loans modified in troubled debt restructurings where concessions have been granted to borrowers experiencing financial difficulties. These concessions could include a reduction in the interest rate on the loan, payment extensions, forgiveness of principal, forbearance, or other actions intended to maximize collection.

	March 31, 2012
(in thousands)	Recorded Balance		Unpaid Contractual Principal Balance		Specific Allowance		Average Investment in Impaired Loans		*Interest Income Recognized
Loans without a specific valuation allowance:
Commercial construction	$	4,594	$	4,595	$	0	$	4,683	$	18
Commercial secured by real estate		36,312		37,778		0		36,506		332
Commercial other		6,696		7,406		0		6,785		16
Real estate construction		0		0		0		0		0
Real estate mortgage		279		279		0		280		3
Consumer direct		0		0		0		0		0
Consumer indirect		0		0		0		0		0

Loans with a specific valuation allowance:
Commercial construction		5,912		6,764		2,180		5,809		0
Commercial secured by real estate		3,382		3,508		1,246		3,385		0
Commercial other		2,791		5,391		1,104		2,829		0

Totals:
Commercial		59,687		65,442		4,530		59,997		366
Residential		279		279		0		280		3
Consumer		0		0		0		0		0
Total	$	59,966	$	65,721	$	4,530	$	60,277	$	369

	December 31, 2011
(in thousands)	Recorded Balance		Unpaid Contractual Principal Balance		Specific Allowance		Average Investment in Impaired Loans		*Interest Income Recognized
Loans without a specific valuation allowance:
Commercial construction	$	4,778	$	4,778	$	0	$	8,992	$	252
Commercial secured by real estate		27,811		29,765		0		31,480		1,543
Commercial other		1,770		2,501		0		3,392		143
Real estate construction		27		27		0		19		1
Real estate mortgage		82		82		0		84		5
Consumer direct		93		93		0		82		9
Consumer indirect		112		112		0		99		12

Loans with a specific valuation allowance:
Commercial construction		5,794		6,643		2,203		7,681		0
Commercial secured by real estate		3,525		3,669		1,156		4,747		23
Commercial other		3,432		6,022		1,310		5,071		22

Totals:
Commercial		47,110		53,378		4,669		61,363		1,983
Residential		109		109		0		103		6
Consumer		205		205		0		181		21
Total	$	47,424	$	53,692	$	4,669	$	61,647	$	2,010

	March 31, 2011
(in thousands)	Recorded Balance		Unpaid Contractual Principal Balance		Specific Allowance		Average Investment in Impaired Loans		*Interest Income Recognized
Loans without a specific valuation allowance:
Commercial construction	$	7,537	$	8,394	$	0	$	7,540	$	71
Commercial secured by real estate		30,903		33,279		0		32,777		257
Commercial other		3,870		4,970		0		3,886		56
Real estate construction		0		0		0		0		0
Real estate mortgage		85		85		0		85		2
Consumer direct		43		43		0		43		1
Consumer indirect		89		89		0		89		2

Loans with a specific valuation allowance:
Commercial construction		9,356		9,788		2,805		9,356		0
Commercial secured by real estate		5,189		5,379		1,622		5,219		23
Commercial other		7,247		8,645		2,913		7,963		0

Totals:
Commercial		64,102		70,455		7,340		66,741		407
Residential		85		85		0		85		2
Consumer		132		132		0		132		3
Total	$	64,319	$	70,672	$	7,340	$	66,958	$	412

Included in certain loan categories of impaired loans are certain loans and leases that have been modified in a troubled debt restructuring, where economic concessions have been granted to borrowers who have experienced financial difficulties. These concessions typically result from our loss mitigation activities and could include reductions in the interest rate, payment extensions, forgiveness of principal, forbearance or other actions. Modifications of terms for our loans and their inclusion as troubled debt restructurings are based on individual facts and circumstances. Loan modifications that are included as troubled debt restructurings may involve either an increase or reduction of the interest rate, extension of the term of the loan, or deferral of principal and/or interest payments, regardless of the period of the modification. All of the loans identified as troubled debt restructuring were modified due to financial stress of the borrower. In order to determine if a borrower is experiencing financial difficulty, an evaluation is performed to determine the probability that the borrower will be in payment default on any of its debt in the foreseeable future with the modification. This evaluation is performed under CTBI's internal underwriting policy.

When we modify loans and leases in a troubled debt restructuring, we evaluate any possible impairment similar to other impaired loans based on the present value of expected future cash flows, discounted at the contractual interest rate of the original loan or lease agreement, or use the current fair value of the collateral, less selling costs for collateral dependent loans. If we determined that the value of the modified loan is less than the recorded investment in the loan (net of previous charge-offs, deferred loan fees or costs and unamortized premium or discount), impairment is recognized through an allowance estimate or a charge-off to the allowance. In periods subsequent to modification, we evaluate all troubled debt restructuring, including those that have payment defaults, for possible impairment and recognize impairment through the allowance.

During 2012, certain loans were modified in troubled debt restructurings, where economic concessions were granted to borrowers consisting of reductions in the interest rates, payment extensions, forgiveness of principal, and forbearances. Presented below, segregated by class of loans, are troubled debt restructurings that occurred during the three months ended March 31, 2012:

	Three Months Ended March 31, 2012
(in thousands)	Number of Loans		Post-Modification Outstanding Balance		Net Charge-offs Resulting from Modification
Commercial:
Commercial construction		0	$	0	$	0
Commercial secured by real estate		3		1,665		0
Commercial other		1		48		0
Residential:
Real estate construction		0		0		0
Real estate mortgage		3		165		0
Consumer:
Consumer direct		1		10		0
Consumer indirect		4		52		0
Total troubled debt restructurings		12	$	1,940	$	0

Loans retain their accrual status at the time of their modification. As a result, if a loan is on nonaccrual at the time it is modified, it stays as nonaccrual, and if a loan is on accrual at the time of the modification, it generally stays on accrual. Commercial and consumer loans modified in a troubled debt restructuring are closely monitored for delinquency as an early indicator of possible future default. If loans modified in a troubled debt restructuring subsequently default, CTBI evaluates the loan for possible further impairment. The allowance for loan losses may be increased, adjustments may be made in the allocation of the allowance, or partial charge-offs may be taken to further write-down the carrying value of the loan. Presented below, segregated by class of loans, are loans that were modified as troubled debt restructurings which have subsequently defaulted. CTBI considers a loan in default when it is 90 days or more past due or transferred to nonaccrual.

(in thousands)	Three Months Ended March 31, 2012
	Number of Loans		Recorded Balance
Commercial:
Commercial construction		0	$	0
Commercial secured by real estate		3		370
Commercial other		2		32

Residential:
Real estate construction		0		0
Real estate mortgage		2		12
Home equity		1		8

Consumer:
Consumer direct		2		2
Consumer indirect		0		0
Total defaulted restructured loans		10	$	424

	March 31, 2012
(in thousands)	Commercial Construction		Commercial Secured by Real Estate		Commercial Other		Equipment Lease Financing			Real Estate Construction		Real Estate Mortgage		Home Equity		Consumer Direct			Consumer Indirect			Total
Allowance for loan losses
Beginning balance	$	4,023	$	11,753	$	5,608	$	112		$	354	$	4,302	$	562	$	917		$	5,540		$	33,171
Provision charged to expense		42		1,280		718		(7	)		155		71		29		(117	)		(1,011	)		1,160
Losses charged off		18		96		612		0			171		190		46		146			847			2,126
Recoveries		19		40		251		0			6		57		1		192			401			967
Ending balance	$	4,066	$	12,977	$	5,965	$	105		$	344	$	4,240	$	546	$	846		$	4,083		$	33,172

Ending balance:
Individually evaluated for impairment	$	2,180	$	1,246	$	1,104	$	0		$	0	$	0	$	0	$	0		$	0		$	4,530
Collectively evaluated for impairment	$	1,886	$	11,731	$	4,861	$	105		$	344	$	4,240	$	546	$	846		$	4,083		$	28,642

Loans
Ending balance:
Individually evaluated for impairment	$	10,506	$	39,694	$	9,487	$	0		$	0	$	279	$	0	$	0		$	0		$	59,966
Collectively evaluated for impairment	$	103,655	$	767,215	$	372,459	$	8,219		$	52,558	$	648,059	$	83,498	$	121,645		$	324,894		$	2,482,202

	December 31, 2011
(in thousands)	Commercial Construction		Commercial Secured by Real Estate		Commercial Other		Equipment Lease Financing			Real Estate Construction		Real Estate Mortgage		Home Equity		Consumer Direct		Consumer Indirect		Total
Allowance for loan losses
Beginning balance	$	4,332	$	12,327	$	7,392	$	148		$	271	$	2,982	$	407	$	1,169	$	5,777	$	34,805
Provision charged to expense		2,171		3,304		1,867		(36	)		376		2,827		310		257		2,186		13,262
Losses charged off		2,510		4,018		4,092		0			319		1,589		171		961		3,874		17,534
Recoveries		30		140		441		0			26		82		16		452		1,451		2,638
Ending balance	$	4,023	$	11,753	$	5,608	$	112		$	354	$	4,302	$	562	$	917	$	5,540	$	33,171

Ending balance:
Individually evaluated for impairment	$	2,203	$	1,156	$	1,310	$	0		$	0	$	0	$	0	$	0	$	0	$	4,669
Collectively evaluated for impairment	$	1,820	$	10,597	$	4,298	$	112		$	354	$	4,302	$	562	$	917	$	5,540	$	28,502

Loans
Ending balance:
Individually evaluated for impairment	$	10,572	$	31,336	$	5,202	$	0		$	27	$	82	$	0	$	93	$	112	$	47,424
Collectively evaluated for impairment	$	110,005	$	767,551	$	369,395	$	9,706		$	53,507	$	649,993	$	84,841	$	123,856	$	340,270	$	2,509,124

	March 31, 2011
(in thousands)	Commercial Construction		Commercial Secured by Real Estate		Commercial Other		Equipment Lease Financing			Real Estate Construction			Real Estate Mortgage		Home Equity		Consumer Direct		Consumer Indirect		Total
Allowance for loan losses
Beginning balance	$	4,332	$	12,327	$	7,392	$	148		$	271		$	2,982	$	407	$	1,169	$	5,777	$	34,805
Provision charged to expense		433		1,613		906		(10	)		(17	)		683		78		43		658		4,387
Losses charged off		98		2,015		875		0			0			342		46		291		995		4,662
Recoveries		1		27		81		0			8			22		0		140		343		622
Ending balance	$	4,668	$	11,952	$	7,504	$	138		$	262		$	3,345	$	439	$	1,061	$	5,783	$	35,152

Ending balance:
Individually evaluated for impairment	$	2,805	$	1,622	$	2,913	$	0		$	0		$	0	$	0	$	0	$	0	$	7,340
Collectively evaluated for impairment	$	1,863	$	10,330	$	4,591	$	138		$	262		$	3,345	$	439	$	1,061	$	5,783	$	27,812

Loans
Ending balance:
Individually evaluated for impairment	$	16,893	$	36,092	$	11,117	$	0		$	0		$	85	$	0	$	43	$	89	$	64,319
Collectively evaluated for impairment	$	116,887	$	755,741	$	384,217	$	12,359		$	50,046		$	637,754	$	83,767	$	121,642	$	359,316	$	2,521,729