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Regulatory Matters
 12 Months Ended
Dec. 31, 2012
Regulatory Matters [Abstract]  
Regulatory Matters
20. Regulatory Matters
 
CTBI's principal source of funds is dividends received from our subsidiary bank, Community Trust Bank, Inc. ("CTB"). Regulations limit the amount of dividends that may be paid by CTB without prior approval. During 2013, approximately $47.9 million plus any 2013 net profits can be paid by CTB without prior regulatory approval.
 
The Federal Reserve Bank adopted quantitative measures which assign risk weightings to assets and off-balance sheet items and also define and set minimum regulatory capital requirements (risk based capital ratios). All banks are required to have a minimum Tier 1 (core capital) leverage ratio of 4% of adjusted quarterly average assets, Tier 1 capital of at least 4% of risk-weighted assets, and total capital of at least 8% of risk-weighted assets. Tier 1 capital consists principally of shareholders' equity including capital-qualifying subordinated debt but excluding unrealized gains and losses on securities available-for-sale, less goodwill and certain other intangibles. Total capital consists of Tier 1 capital plus certain debt instruments and the reserve for credit losses, subject to limitation. Failure to meet certain capital requirements can initiate certain actions by regulators that, if undertaken, could have a direct material effect on our consolidated financial statements. The regulations also define well-capitalized levels of Tier 1 leverage, Tier 1, and total capital as 5%, 6%, and 10%, respectively. We had Tier 1 leverage, Tier 1, and total capital ratios above the well-capitalized levels at December 31, 2012 and 2011. We believe, as of December 31, 2012, CTBI meets all capital adequacy requirements for which it is subject to be defined as well-capitalized under the regulatory framework for prompt corrective action.
 
Under the current Federal Reserve Board's regulatory framework, certain capital securities offered by wholly owned unconsolidated trust preferred entities of CTBI are included as Tier 1 regulatory capital. On March 1, 2005, the Federal Reserve Board adopted a final rule that allows the continued limited inclusion of trust preferred securities in the Tier 1 capital of bank holding companies ("BHCs"). Under the final rule, trust preferred securities and other restricted core capital elements are subject to stricter quantitative limits. The Board's final rule limits restricted core capital elements to 25 percent of all core capital elements, net of goodwill less any associated deferred tax liability. Amounts of restricted core capital elements in excess of these limits generally may be included in Tier 2 capital. The final rule provided a five-year transition period, which ended March 31, 2009, for application of the quantitative limits. The requirement for trust preferred securities to include a call option has been eliminated, and standards for the junior subordinated debt underlying trust preferred securities eligible for Tier 1 capital treatment have been clarified. The final rule addresses supervisory concerns, competitive equity considerations, and the accounting for trust preferred securities. The final rule also strengthens the definition of regulatory capital by incorporating longstanding Board policies regarding the acceptable terms of capital instruments included in banking organizations' Tier 1 or Tier 2 capital. The final rule did not have a material impact on our regulatory ratios.
 
Consolidated Capital Ratios
 
   
Actual
  
For Capital Adequacy Purposes
 
(in thousands)
 
Amount
  
Ratio
  
Amount
  
Ratio
 
As of December 31, 2012:
            
Tier 1 capital (to average assets)
 $380,549   10.65% $142,929   4.00%
Tier 1 capital (to risk weighted assets)
  380,549   15.23   99,947   4.00 
Total capital (to risk weighted assets)
  412,014   16.49   199,886   8.00 
                  
As of December 31, 2011:
                
Tier 1 capital (to average assets)
 $349,348   9.89% $141,293   4.00%
Tier 1 capital (to risk weighted assets)
  349,348   13.88   100,677   4.00 
Total capital (to risk weighted assets)
  381,038   15.14   201,341   8.00 
 
Community Trust Bank, Inc.'s Capital Ratios
 
   
Actual
  
For Capital Adequacy Purposes
  
To Be Well-Capitalized Under Prompt Corrective Action Provision
 
(in thousands)
 
Amount
  
Ratio
  
Amount
  
Ratio
  
Amount
  
Ratio
 
As of December 31, 2012:
                  
Tier 1 capital (to average assets)
 $363,331   10.21% $142,343   4.00% $177,929   5.00%
Tier 1 capital (to risk weighted assets)
  363,331   14.58   99,679   4.00   149,519   6.00 
Total capital (to risk weighted assets)
  394,796   15.84   199,392   8.00   249,240   10.00 
                          
As of December 31, 2011:
                        
Tier 1 capital (to average assets)
 $334,553   9.51% $140,716   4.00% $175,895   5.00%
Tier 1 capital (to risk weighted assets)
  334,553   13.32   100,466   4.00   150,700   6.00 
Total capital (to risk weighted assets)
  366,243   14.58   200,956   8.00   251,195   10.00 

In the summer of 2012, our primary federal regulators, published two notices of proposed rulemaking (the "2012 Capital Proposals") that would substantially revise the risk-based capital requirements applicable to bank holding companies and depository institutions, including CTBI and CTB, compared to the current U.S. risk-based capital rules, which are based on the international capital accords of the Basel Committee on Banking Supervision (the "Basel Committee") which are generally referred to as "Basel I."
 
One of the 2012 Capital Proposals (the "Basel III Proposal") addresses the components of capital and other issues affecting the numerator in banking institutions' regulatory capital ratios, and would implement the Basel Committee's December 2010 framework, known as "Basel III," for strengthening international capital standards. The other proposal (the "Standardized Approach Proposal") addresses risk weights and other issues affecting the denominator in banking institutions' regulatory capital ratios, and would replace the existing Basel I-derived risk weighting approach with a more risk-sensitive approach based, in part, on the standardized approach in the Basel Committee's 2004 "Basel II" capital accords.
 
The proposed rules include new risk-based capital and leverage ratios, which would be phased in through 2019 and would revise the definition of what constitutes "capital" for purposes of calculating those ratios. The proposed new minimum capital level requirements applicable to CTBI and CTB under the proposals would be: (i) a new common equity Tier 1 capital ratio of 4.5%; (ii) a Tier 1 capital ratio of 6% (increased from 4%); (iii) a total capital ratio of 8% (unchanged from current rules); and (iv) a Tier 1 leverage ratio of 4% for all institutions. The proposed rules would also establish a "capital conservation buffer" of 2.5% above the new regulatory minimum capital requirements, which must consist entirely of common equity Tier 1 capital and would result in the following minimum ratios: (i) a common equity Tier 1 capital ratio of 7.0%; (ii) a Tier 1 capital ratio of 8.5%; and (iii) a total capital ratio of 10.5%. The new capital conservation buffer requirement would be phased in beginning in January 2016 at 0.625% of risk-weighted assets and would increase by that amount each year until fully implemented in January 2019. An institution would be subject to limitations on paying dividends, engaging in share repurchases, and paying discretionary bonuses if its capital level falls below the buffer amount. These limitations would establish a maximum percentage of eligible retained income that could be utilized for such actions.
 
Although the Basel III Proposal was proposed to come into effect on January 1, 2013, the federal banking agencies jointly announced on November 9, 2012 that they did not expect any of the proposed rules to become effective on that date. As proposed, the Standardized Approach Proposal would come into effect on January 1, 2015.