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Fair Market Value of Financial Assets and Liabilities (Tables) | 9 Months Ended
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Sep. 30, 2019
Fair Market Value of Financial Assets and Liabilities [Abstract] |
Fair Value Assets Measured on Recurring Basis | The following tables present the fair value measurements of assets recognized in the accompanying balance sheets measured at fair value on a recurring basis as of September 30, 2019 and December 31, 2018 and indicate the level within the fair value hierarchy of the valuation techniques.
|  |  |  |  | Fair Value Measurements at September 30, 2019 Using |
(in thousands) |  | Fair Value |  |  | Quoted Prices in Active Markets for Identical Assets (Level 1) |  |  | Significant Other Observable Inputs (Level 2) |  |  | Significant Unobservable Inputs (Level 3) |
Assets measured – recurring basis |  |  |  |  |  |  |  |  |  |  |  |
Available-for-sale securities: |  |  |  |  |  |  |  |  |  |  |  |
U.S. Treasury and government agencies |  | $ | 193,367 |  |  | $ | 69,938 |  |  | $ | 123,429 |  |  | $ | 0 |
State and political subdivisions |  |  | 104,702 |  |  |  | 0 |  |  |  | 104,702 |  |  |  | 0 |
U.S. government sponsored agency mortgage-backed securities |  |  | 320,463 |  |  |  | 0 |  |  |  | 320,463 |  |  |  | 0 |
Other debt securities |  |  | 31,444 |  |  |  | 0 |  |  |  | 31,444 |  |  |  | 0 |
Equity securities at fair value |  |  | 1,743 |  |  |  | 0 |  |  |  | 0 |  |  |  | 1,743 |
Mortgage servicing rights |  |  | 2,904 |  |  |  | 0 |  |  |  | 0 |  |  |  | 2,904 |
|  |  |  |  | Fair Value Measurements at December 31, 2018 Using |
(in thousands) |  | Fair Value |  |  | Quoted Prices in Active Markets for Identical Assets (Level 1) |  |  | Significant Other Observable Inputs (Level 2) |  |  | Significant Unobservable Inputs (Level 3) |
Assets measured – recurring basis |  |  |  |  |  |  |  |  |  |  |  |
Available-for-sale securities: |  |  |  |  |  |  |  |  |  |  |  |
U.S. Treasury and government agencies |  | $ | 217,938 |  |  | $ | 91,028 |  |  | $ | 126,910 |  |  | $ | 0 |
State and political subdivisions |  |  | 124,488 |  |  |  | 0 |  |  |  | 124,488 |  |  |  | 0 |
U.S. government sponsored agency mortgage-backed securities |  |  | 250,819 |  |  |  | 0 |  |  |  | 250,819 |  |  |  | 0 |
Other debt securities |  |  | 501 |  |  |  | 0 |  |  |  | 501 |  |  |  | 0 |
Equity securities at fair value |  |  | 1,173 |  |  |  | 0 |  |  |  | 0 |  |  |  | 1,173 |
Mortgage servicing rights |  |  | 3,607 |  |  |  | 0 |  |  |  | 0 |  |  |  | 3,607 |
Reconciliation of the Beginning and Ending Balance of Recurring Fair Value Measurements Using Significant Unobservable (Level 3) Inputs | Following is a reconciliation of the beginning and ending balances of recurring fair value measurements recognized in the accompanying balance sheet using significant unobservable (Level 3) inputs for the three and nine months ended September 30, 2019 and 2018:
(in thousands) |  | Three Months Ended September 30, 2019 |  |  | Three Months Ended September 30, 2018 |
|  | Equity Securities at Fair Value |  |  | Mortgage Servicing Rights |  |  | Equity Securities at Fair Value |  |  | Mortgage Servicing Rights |
Beginning balance |  | $ | 1,727 |  |  | $ | 3,119 |  |  | $ | 0 |  |  | $ | 3,772 |
Total unrealized gains (losses) Included in net income |  |  | 16 |  |  |  | (325 | ) |  |  | 0 |  |  |  | 45 |
Issues |  |  | 0 |  |  |  | 139 |  |  |  | 0 |  |  |  | 118 |
Settlements |  |  | 0 |  |  |  | (29 | ) |  |  | 0 |  |  |  | (120 | )
Ending balance |  | $ | 1,743 |  |  | $ | 2,904 |  |  | $ | 0 |  |  | $ | 3,815 |
Total gains (losses) for the period included in net income attributable to the change in unrealized gains or losses related to assets still held at the reporting date |  | $ | 16 |  |  | $ | (325 | ) |  | $ | 0 |  |  | $ | 45 |
(in thousands) |  | Nine Months Ended September 30, 2019 |  |  | Nine Months Ended September 30, 2018 |
|  | Equity Securities at Fair Value |  |  | Mortgage Servicing Rights |  |  | Equity Securities at Fair Value |  |  | Mortgage Servicing Rights |
Beginning balance |  | $ | 1,173 |  |  | $ | 3,607 |  |  | $ | 0 |  |  | $ | 3,484 |
Total unrealized gains (losses) Included in net income |  |  | 570 |  |  |  | (907 | ) |  |  | 0 |  |  |  | 341 |
Issues |  |  | 0 |  |  |  | 446 |  |  |  | 0 |  |  |  | 329 |
Settlements |  |  | 0 |  |  |  | (242 | ) |  |  | 0 |  |  |  | (339 | )
Ending balance |  | $ | 1,743 |  |  | $ | 2,904 |  |  | $ | 0 |  |  | $ | 3,815 |
Total gains (losses) for the period included in net income attributable to the change in unrealized gains or losses related to assets still held at the reporting date |  | $ | 570 |  |  | $ | (907 | ) |  | $ | 0 |  |  | $ | 341 |
Realized and Unrealized Gains and Losses for Items Included in Net Income in the Consolidated Statements of Income | Realized and unrealized gains and losses for items reflected in the table above are included in net income in the consolidated statements of income as follows:
Noninterest Income |  |  |  |  |  |  |  |  |
|  | Three Months Ended September 30 |  |  | Nine Months Ended September 30 |
(in thousands) |  | 2019 |  |  | 2018 |  |  | 2019 |  |  | 2018 |
Total gains (losses) |  | $ | (338 | ) |  | $ | (75 | ) |  | $ | (579 | ) |  | $ | 2 |
Fair Value Measurements of Recognized Assets Measured on Nonrecurring Basis | The following tables present the fair value measurements of assets recognized in the accompanying balance sheets measured at fair value on a nonrecurring basis as of September 30, 2019 and December 31, 2018 and indicate the level within the fair value hierarchy of the valuation techniques.
|  |  |  |  | Fair Value Measurements at September 30, 2019 Using |
(in thousands) |  | Fair Value |  |  | Quoted Prices in Active Markets for Identical Assets (Level 1) |  |  | Significant Other Observable Inputs (Level 2) |  |  | Significant Unobservable Inputs (Level 3) |
Assets measured – nonrecurring basis |  |  |  |  |  |  |  |  |  |  |  |
Impaired loans (collateral dependent) |  | $ | 1,235 |  |  | $ | 0 |  |  | $ | 0 |  |  | $ | 1,235 |
Other real estate owned |  |  | 5,022 |  |  |  | 0 |  |  |  | 0 |  |  |  | 5,022 |
|  |  |  |  | Fair Value Measurements at December 31, 2018 Using |
(in thousands) |  | Fair Value |  |  | Quoted Prices in Active Markets for Identical Assets (Level 1) |  |  | Significant Other Observable Inputs (Level 2) |  |  | Significant Unobservable Inputs (Level 3) |
Assets measured – nonrecurring basis |  |  |  |  |  |  |  |  |  |  |  |
Impaired loans (collateral dependent) |  | $ | 747 |  |  | $ | 0 |  |  | $ | 0 |  |  | $ | 747 |
Other real estate owned |  |  | 6,500 |  |  |  | 0 |  |  |  | 0 |  |  |  | 6,500 |
Quantitative Information About Unobservable Inputs Used in Recurring and Nonrecurring Level 3 Fair Value Measurements | The following tables present quantitative information about unobservable inputs used in recurring and nonrecurring Level 3 fair value measurements at September 30, 2019 and December 31, 2018.
(in thousands) | Quantitative Information about Level 3 Fair Value Measurements
| Fair Value at September 30, 2019 | Valuation Technique(s) | Unobservable Input | Range (Weighted Average)
Equity securities at fair value | $1,743 | Discount cash flows, computer pricing model | Discount rate | 8.0% - 12.0% (10.0%)
|  |  | Conversion date | Dec 2022 – Dec 2026 (Dec 2024)
Mortgage servicing rights | $2,904 | Discount cash flows, computer pricing model | Constant prepayment rate | 0.0%% - 25.6% (14.6%)
|  |  | Probability of default | 0.0% - 100.0% (2.5%)
|  |  | Discount rate | 10.0% - 11.5% (10.1%)
Impaired loans (collateral-dependent) | $1,235 | Market comparable properties | Marketability discount | (0.1%) - 99.0% (44.0%)
Other real estate owned | $5,022 | Market comparable properties | Comparability adjustments | 9.5% - 95.0% (15.2%)
(in thousands) | Quantitative Information about Level 3 Fair Value Measurements
| Fair Value at December 31, 2018 | Valuation Technique(s) | Unobservable Input | Range (Weighted Average)
Equity securities at fair value | $1,173 | Discount cash flows, computer pricing model | Discount rate | 8.0% - 12.0% (10.0%)
|  |  | Conversion date | Dec 2022 – Dec 2026 (Dec 2024)
Mortgage servicing rights | $3,607 | Discount cash flows, computer pricing model | Constant prepayment rate | 7.0% - 28.1% (9.5%)
|  |  | Probability of default | 0.0% - 100.0% (2.6%)
|  |  | Discount rate | 10.0% - 11.5% (10.1%)
Impaired loans (collateral-dependent) | $747 | Market comparable properties | Marketability discount | 0.0% - 95.1% (41.5%)
Other real estate owned | $6,500 | Market comparable properties | Comparability adjustments | 6.0% - 47.6% (14.9%)
Fair Value of Financial Instruments and Levels within the Fair Value Hierarchy of the Valuation Techniques | The following table presents estimated fair value of CTBI’s financial instruments as of September 30, 2019 and indicates the level within the fair value hierarchy of the valuation techniques. In accordance with the prospective adoption of ASU 2016-01, the fair values as of September 30, 2019 were measured using an exit price notion.
|  |  |  |  | Fair Value Measurements at September 30, 2019 Using |
(in thousands) |  | Carrying Amount |  |  | Quoted Prices in Active Markets for Identical Assets (Level 1) |  |  | Significant Other Observable Inputs (Level 2) |  |  | Significant Unobservable Inputs (Level 3) |
Financial assets: |  |  |  |  |  |  |  |  |  |  |  |
Cash and cash equivalents |  | $ | 221,821 |  |  | $ | 221,821 |  |  | $ | 0 |  |  | $ | 0 |
Certificates of deposit in other banks |  |  | 245 |  |  |  | 0 |  |  |  | 245 |  |  |  | 0 |
Securities available-for-sale |  |  | 649,976 |  |  |  | 69,938 |  |  |  | 580,038 |  |  |  | 0 |
Securities held-to-maturity |  |  | 517 |  |  |  | 0 |  |  |  | 517 |  |  |  | 0 |
Equity securities at fair value |  |  | 1,743 |  |  |  | 0 |  |  |  | 0 |  |  |  | 1,743 |
Loans held for sale |  |  | 1,943 |  |  |  | 1,987 |  |  |  | 0 |  |  |  | 0 |
Loans, net |  |  | 3,179,974 |  |  |  | 0 |  |  |  | 0 |  |  |  | 3,241,555 |
Federal Home Loan Bank stock |  |  | 10,794 |  |  |  | 0 |  |  |  | 10,794 |  |  |  | 0 |
Federal Reserve Bank stock |  |  | 4,887 |  |  |  | 0 |  |  |  | 4,887 |  |  |  | 0 |
Accrued interest receivable |  |  | 15,397 |  |  |  | 0 |  |  |  | 15,397 |  |  |  | 0 |
Mortgage servicing rights |  |  | 2,904 |  |  |  | 0 |  |  |  | 0 |  |  |  | 2,904 |
Financial liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Deposits |  | $ | 3,389,555 |  |  | $ | 849,582 |  |  | $ | 2,558,188 |  |  | $ | 0 |
Repurchase agreements |  |  | 228,755 |  |  |  | 0 |  |  |  | 0 |  |  |  | 228,833 |
Federal funds purchased |  |  | 5,900 |  |  |  | 0 |  |  |  | 5,900 |  |  |  | 0 |
Advances from Federal Home Loan Bank |  |  | 421 |  |  |  | 0 |  |  |  | 451 |  |  |  | 0 |
Long-term debt |  |  | 57,841 |  |  |  | 0 |  |  |  | 0 |  |  |  | 49,382 |
Accrued interest payable |  |  | 6,657 |  |  |  | 0 |  |  |  | 6,657 |  |  |  | 0 |
Unrecognized financial instruments: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Letters of credit |  | $ | 0 |  |  | $ | 0 |  |  | $ | 0 |  |  | $ | 0 |
Commitments to extend credit |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |
Forward sale commitments |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |
The following table presents estimated fair value of CTBI’s financial instruments as of December 31, 2018 and indicates the level within the fair value hierarchy of the valuation techniques.
|  |  |  |  | Fair Value Measurements at December 31, 2018 Using |
(in thousands) |  | Carrying Amount |  |  | Quoted Prices in Active Markets for Identical Assets (Level 1) |  |  | Significant Other Observable Inputs (Level 2) |  |  | Significant Unobservable Inputs (Level 3) |
Financial assets: |  |  |  |  |  |  |  |  |  |  |  |
Cash and cash equivalents |  | $ | 141,450 |  |  | $ | 141,450 |  |  | $ | 0 |  |  | $ | 0 |
Certificates of deposit in other banks |  |  | 3,920 |  |  |  | 0 |  |  |  | 3,914 |  |  |  | 0 |
Securities available-for-sale |  |  | 593,746 |  |  |  | 91,028 |  |  |  | 502,718 |  |  |  | 0 |
Securities held-to-maturity |  |  | 649 |  |  |  | 0 |  |  |  | 649 |  |  |  | 0 |
Equity securities at fair value |  |  | 1,173 |  |  |  | 0 |  |  |  | 0 |  |  |  | 1,173 |
Loans held for sale |  |  | 2,461 |  |  |  | 2,518 |  |  |  | 0 |  |  |  | 0 |
Loans, net |  |  | 3,172,730 |  |  |  | 0 |  |  |  | 0 |  |  |  | 3,175,908 |
Federal Home Loan Bank stock |  |  | 14,713 |  |  |  | 0 |  |  |  | 14,713 |  |  |  | 0 |
Federal Reserve Bank stock |  |  | 4,887 |  |  |  | 0 |  |  |  | 4,887 |  |  |  | 0 |
Accrued interest receivable |  |  | 14,432 |  |  |  | 0 |  |  |  | 14,432 |  |  |  | 0 |
Mortgage servicing rights |  |  | 3,607 |  |  |  | 0 |  |  |  | 0 |  |  |  | 3,607 |
Financial liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Deposits |  | $ | 3,305,950 |  |  | $ | 803,316 |  |  | $ | 2,513,084 |  |  | $ | 0 |
Repurchase agreements |  |  | 232,712 |  |  |  | 0 |  |  |  | 0 |  |  |  | 232,796 |
Federal funds purchased |  |  | 1,180 |  |  |  | 0 |  |  |  | 1,180 |  |  |  | 0 |
Advances from Federal Home Loan Bank |  |  | 436 |  |  |  | 0 |  |  |  | 468 |  |  |  | 0 |
Long-term debt |  |  | 59,341 |  |  |  | 0 |  |  |  | 0 |  |  |  | 44,166 |
Accrued interest payable |  |  | 2,902 |  |  |  | 0 |  |  |  | 2,902 |  |  |  | 0 |
Unrecognized financial instruments: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Letters of credit |  | $ | 0 |  |  | $ | 0 |  |  | $ | 0 |  |  | $ | 0 |
Commitments to extend credit |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |
Forward sale commitments |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |

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- Definition Tabular disclosure of the amount of gains or losses for the period included in earnings or resulted in a change to net assets, have arisen from the use of significant unobservable inputs (level 3) to measure the fair value of assets, liabilities, and financial instruments classified in shareholders' equity. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 2 -Subparagraph (c)(1) -URI http://asc.fasb.org/extlink&oid=117815213&loc=d3e19207-110258 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 2 -Subparagraph (d) -URI http://asc.fasb.org/extlink&oid=117815213&loc=d3e19207-110258 + Details
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- Definition Tabular disclosure of assets and liabilities by class, including financial instruments measured at fair value that are classified in shareholders' equity, if any, that are measured at fair value on a nonrecurring basis in periods after initial recognition (for example, impaired assets). Disclosures may include, but are not limited to: (a) the fair value measurements recorded and the reasons for the measurements and (b) the level within the fair value hierarchy in which the fair value measurements are categorized in their entirety (levels 1, 2, 3). + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 2 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=117815213&loc=d3e19207-110258 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 2 -Subparagraph (bbb) -URI http://asc.fasb.org/extlink&oid=117815213&loc=d3e19207-110258 Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 2 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=117815213&loc=d3e19207-110258 + Details
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- Definition Tabular disclosure of assets, including [financial] instruments measured at fair value that are classified in stockholders' equity, if any, by class that are measured at fair value on a recurring basis. The disclosures contemplated herein include the fair value measurements at the reporting date by the level within the fair value hierarchy in which the fair value measurements in their entirety fall, segregating fair value measurements using quoted prices in active markets for identical assets (Level 1), significant other observable inputs (Level 2), and significant unobservable inputs (Level 3). + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 2 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=117815213&loc=d3e19207-110258 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 2 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=117815213&loc=d3e19207-110258 + Details
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- Definition Tabular disclosure of the fair value measurement of assets using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes during the period attributable to the following: (1) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings (or changes in net assets) and gains or losses recognized in other comprehensive income (loss), and a description of where those gains or losses included in earnings (or changes in net assets) are reported in the statement of income (or activities); (2) purchases, sales, issues, and settlements (each type disclosed separately); and (3) transfers in and transfers out of Level 3 (for example, transfers due to changes in the observability of significant inputs), by class of asset. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=117815213&loc=d3e19279-110258 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 2 -Subparagraph (c) -URI http://asc.fasb.org/extlink&oid=117815213&loc=d3e19207-110258 + Details
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