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Summary of Significant Accounting Policies (Tables) | 3 Months Ended
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Mar. 31, 2020
Summary of Significant Accounting Policies [Abstract] |
Impact of Adoption of ASU 2016-13 by Major Loan Classifications | As previously disclosed, CTBI formed an implementation team to oversee the adoption of the ASU including assessing the impact on its accounting and disclosures. The implementation team was a cross-functional working group comprised of individuals from areas including credit, finance, and operations. The team has established the historical data available and has identified the loan segments to be analyzed. Credit losses for loans that no longer share similar risk characteristics are estimated on an individual basis. The team has determined the portfolio methodologies and relevant economic factors to be utilized and began running parallel with its current model as part of the monthly fourth quarter 2019 loan portfolio analysis. The team has developed a CECL allowance model which calculates reserves over the life of the loan and is largely driven by historical losses, portfolio characteristics, risk-grading, economic outlook, and other qualitative factors. The methodologies utilize a single economic forecast over a twelve month reasonable and supportable forecast period with immediate reversion to historical losses. CTBI adopted this ASU effective January 1, 2020 using the modified retrospective approach. The effect of adoption was a $3.0 million increase in the allowance for credit losses (formerly referred to as the allowance for loan losses) and a $112 thousand increase in other liabilities for off-balance sheet credit exposure with a related decrease in shareholders’ equity of $2.4 million, net of deferred tax. The table below shows the impact of the adoption of ASU 2016-13 by major loan classifications:
|  | December 31, 2019 Probable Incurred Losses |  |  | January 1, 2020 CECL Adoption |
(dollars in thousands) |  | Amount |  |  | % of Portfolio |  |  | Amount |  |  | % of Portfolio |
Allowance for loan and lease losses transitioned to allowance for credit losses: |  |  |  |  |  |  |  |  |  |  |  |
Commercial |  | $ | 21,683 |  |  |  | 1.30 | % |  | $ | 21,680 |  |  |  | 1.30 | %
Residential mortgage |  |  | 5,501 |  |  |  | 0.61 | % |  |  | 7,319 |  |  |  | 0.81 | %
Consumer direct |  |  | 1,711 |  |  |  | 1.16 | % |  |  | 1,671 |  |  |  | 1.13 | %
Consumer indirect |  |  | 6,201 |  |  |  | 1.18 | % |  |  | 7,467 |  |  |  | 1.42 | %
Total allowance for loan and lease losses/allowance for credit losses |  | $ | 35,096 |  |  |  | 1.08 | % |  | $ | 38,137 |  |  |  | 1.17 | %
Reserve for unfunded lending commitments |  | $ | 274 |  |  |  |  |  |  | $ | 386 |  |  |  |  |

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- Definition Tabular disclosure of the comparison between amounts disclosed under previous guidance and new guidance. + References No definition available. + Details
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