10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

[X]	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
	For the fiscal year ended December 31, 2006
	Or
[ ]	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
	For the transition period from _____________ to _____________

Commission file number 0-11129

COMMUNITY TRUST BANCORP, INC.

(Exact name of registrant as specified in its charter)

Kentucky	61-0979818
(State or other jurisdiction of incorporation or organization)	IRS Employer Identification No.
346 North Mayo Trail Pikeville, Kentucky (address of principal executive offices)	41501 (Zip Code)

(606) 432-1414

(Registrant’s telephone number)

Securities registered pursuant to Section 12(b) of the Act:

Common Stock, $5.00 par value

(Title of Class)

Securities registered pursuant to Section 12(g) of the Act:

None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes No ü

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.

Yes No ü

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.

Yes ü No

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [ ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of "accelerated filer and large accelerated filer" in Rule 12b-2 of the Exchange Act.

Large accelerated filer Accelerated filer ü Non-accelerated filer

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes No ü

Based upon the closing price of the Common Shares of the Registrant on the NASDAQ-Stock Market LLC - Global Select Market, the aggregate market value of voting stock held by non-affiliates of the Registrant as of June 30, 2006 was $492.1 million. For the purpose of the foregoing calculation only, all directors and executive officers of the Registrant have been deemed affiliates. The number of shares outstanding of the Registrant’s Common Stock as of February 28, 2007 was 15,203,174.

TABLE OF CONTENTS

DOCUMENTS INCORPORATED BY REFERENCE	i
PART I
Item 1. Business	1
Item 1A. Risk Factors	3
Item 1B. Unresolved Staff Comments	7
Selected Statistical Information	8
Item 2. Properties	16
Item 3. Legal Proceedings	17
Item 4. Submission of Matters to a Vote of Security Holders	17
PART II
Item 5. Market for the Registrant's Common Equity, Related Shareholder Matters, and Issuer Repurchases of Equity Securities	19
Item 6. Selected Financial Data 2002-2006	22
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations	23
Item 7A. Quantitative and Qualitative Disclosures about Market Risk	35
Item 8. Financial Statements and Supplementary Data	36
Notes to Consolidated Financial Statements	40
Reports of Independent Registered Public Accounting Firms	64
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	68
Item 9A. Controls and Procedures	68
Item 9B. Other Information	70
PART III
Items 10 and 11. Directors and Executive Officers of the Registrant and Executive Compensation	70
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters	70
Item 13. Certain Relationships and Related Transactions	71
Item 14. Principal Accountant Fees and Services	71
Item 15. Exhibits and Financial Statement Schedules	72
Signatures	73
Index to Exhibits	75

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the following documents are incorporated by reference into the Form 10-K part indicated:

Document	Form 10-K
(1) Proxy statement for the annual meeting of shareholders to be held April 24, 2007	Part III

i

PART I

Item 1. Business

Community Trust Bancorp, Inc. (the "Corporation") is a bank holding company registered with the Board of Governors of the Federal Reserve System pursuant to Section 5(a) of the Bank Holding Company Act of 1956, as amended. Our Corporation was incorporated August 12, 1980, under the laws of the Commonwealth of Kentucky for the purpose of becoming a bank holding company. At December 31, 2006, our Corporation owned all the capital stock of one commercial bank and one trust company, serving small and mid-sized communities in eastern, northeastern, central, and south central Kentucky and southern West Virginia. The commercial bank is Community Trust Bank, Inc., Pikeville, Kentucky (the "Bank") and the trust company is Community Trust and Investment Company, Lexington, Kentucky (the "Trust Company"). At December 31, 2006, our Corporation had total consolidated assets of $3.0 billion and total consolidated deposits, including repurchase agreements, of $2.5 billion, making it the second largest bank holding company headquartered in the Commonwealth of Kentucky.

Effective January 1, 2003, our Bank and Trust Company converted their charters to state charters from national associations. Our Bank remained a member of the Federal Reserve System following conversion. Following its conversion, our Trust Company changed its name from Trust Company of Kentucky, National Association to Community Trust and Investment Company in order to identify more closely our Trust Company with our Bank. While the conversions resulted in some reduction in expenses, they did not result in any changes in the management or operations of our Bank or our Trust Company.

On June 10, 2005, our Bank completed the acquisition of Heritage Community Bank of Danville, Kentucky. All former Heritage Community Bank offices now operate as branch offices of Community Trust Bank, Inc. Our Corporation obtained loans totaling approximately $73.7 million, cash and cash equivalents of approximately $8.1 million, and deposits totaling approximately $69.8 million from this acquisition. The total cost of the acquisition, including direct acquisition costs, was $12.4 million. Goodwill and core deposit intangible of approximately $5.5 million was recorded. Pro forma information has not been presented since the impact of the acquisition is not significant to the consolidated financial statements.

Through its subsidiaries, our Corporation engages in a wide range of commercial and personal banking and trust activities, which include accepting time and demand deposits; making secured and unsecured loans to corporations, individuals and others; providing cash management services to corporate and individual customers; issuing letters of credit; renting safe deposit boxes; and providing funds transfer services. The lending activities of our Bank include making commercial, construction, mortgage, and personal loans. Also available are lease-financing, lines of credit, revolving lines of credit, term loans, and other specialized loans including asset-based financing. Our corporate subsidiaries act as trustees of personal trusts, as executors of estates, as trustees for employee benefit trusts, as registrars, transfer agents, and paying agents for bond and stock issues, as depositories for securities, and as providers of full service brokerage services.

COMPETITION

Our Corporation’s subsidiaries face substantial competition for deposit, credit, and trust relationships, as well as other sources of funding in the communities we serve. Competing providers include state banks, national banks, thrifts, trust companies, insurance companies, mortgage banking operations, credit unions, finance companies, brokerage companies, and other financial and non-financial companies which may offer products functionally equivalent to those offered by our subsidiaries. Many of these providers offer services within and outside the market areas served by our subsidiaries. We strive to offer competitively priced products along with quality customer service to build customer relationships in the communities we serve.

1

Since July 1989, banking legislation in Kentucky places no limits on the number of banks or bank holding companies that a bank holding company may acquire. Interstate acquisitions are allowed where reciprocity exists between the laws of Kentucky and the home state of the bank or bank holding company to be acquired. Bank holding companies continue to be limited to control of less than 15% of deposits held by banks in the states where they do business (exclusive of inter-bank and foreign deposits).

The Gramm-Leach-Bliley Act of 1999 (the "GLB Act") has expanded the permissible activities of a bank holding company. The GLB Act allows qualifying bank holding companies to elect to be treated as financial holding companies. A financial holding company may engage in activities that are financial in nature or are incidental or complementary to financial activities. We have not yet elected to be treated as a financial holding company. The GLB Act also eliminated restrictions imposed by the Glass-Steagall Financial Services Law, adopted in the 1930s, which prevented banking, insurance, and securities firms from fully entering each other’s business. This legislation has resulted in further consolidation in the financial services industry. In addition, removal of these restrictions has increased the number of entities providing banking services and thereby created additional competition.

No material portion of our business is seasonal. We are not dependent upon any one customer or a few customers, and the loss of any one or a few customers would not have a material adverse effect on us. See note 18 to the consolidated financial statements for additional information regarding concentrations of credit.

We do not engage in any operations in foreign countries.

EMPLOYEES

As of December 31, 2006, our Corporation and subsidiaries had 1,021 full-time equivalent employees. Our employees are provided with a variety of employee benefits. A retirement plan, an employee stock ownership plan, group life insurance, major medical insurance, a cafeteria plan, and annual management and employee incentive compensation plans are available to eligible personnel.

SUPERVISION AND REGULATION

We, as a registered bank holding company, are restricted to those activities permissible under the Bank Holding Company Act of 1956, as amended, and are subject to actions of the Board of Governors of the Federal Reserve System thereunder. We are required to file an annual report with the Federal Reserve Board and are subject to an annual examination by the Board.

Our Bank is a state-chartered bank subject to state and federal banking laws and regulations and periodic examination by the Kentucky Office of Financial Institutions and the restrictions, including dividend restrictions, thereunder. Our Bank is also a member of the Federal Reserve System and is subject to certain restrictions imposed by and to examination and supervision under the Federal Reserve Act. Our Trust Company is also regulated by the Kentucky Office of Financial Institutions and the Federal Reserve.

Deposits of our Bank are insured by the Federal Deposit Insurance Corporation, which subjects banks to regulation and examination under the provisions of the Federal Deposit Insurance Act.

The operations of our Corporation and its subsidiaries also are affected by other banking legislation and policies and practices of various regulatory authorities. Such legislation and policies include statutory maximum rates on some loans, reserve requirements, domestic monetary and fiscal policy, and limitations on the kinds of services that may be offered.

2

The Corporation’s annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and all amendments to those reports are available free of charge on our website at www.ctbi.com as soon as reasonably practicable after such materials are electronically filed with or furnished to the Securities and Exchange Commission. The Corporation’s Code of Business Conduct and Ethics is also available on our website. Copies of our annual report will be made available free of charge upon written request.

CAUTIONARY STATEMENT

Certain of the statements contained herein that are not historical facts are forward-looking statements within the meaning of the Private Securities Litigation Reform Act. The Corporation’s actual results may differ materially from those included in the forward-looking statements. Forward-looking statements are typically identified by words or phrases such as "believe," "expect," "anticipate," "intend," "estimate," "may increase," "may fluctuate," and similar expressions or future or conditional verbs such as "will," "should," "would," and "could." These forward-looking statements involve risks and uncertainties including, but not limited to, economic conditions, portfolio growth, the credit performance of the portfolios, including bankruptcies, and seasonal factors; changes in general economic conditions including the performance of financial markets, prevailing inflation and interest rates, realized gains from sales of investments, gains from asset sales, and losses on commercial lending activities; results of various investment activities; the effects of competitors’ pricing policies, changes in laws and regulations, competition, and demographic changes on target market populations’ savings and financial planning needs; industry changes in information technology systems on which we are highly dependent; failure of acquisitions to produce revenue enhancements or cost savings at levels or within the time frames originally anticipated or unforeseen integration difficulties; the adoption by the Corporation of a Federal Financial Institutions Examination Council (FFIEC) policy that provides guidance on the reporting of delinquent consumer loans and the timing of associated credit charge-offs for financial institution subsidiaries; and the resolution of legal proceedings and related matters. In addition, the banking industry in general is subject to various monetary and fiscal policies and regulations, which include those determined by the Federal Reserve Board, the Federal Deposit Insurance Corporation, and state regulators, whose policies and regulations could affect the Corporation’s results. These statements are representative only on the date hereof, and the Corporation undertakes no obligation to update any forward-looking statements made.

Item 1A. Risk Factors

Interest Rate Risk

Changes in interest rates could adversely affect our earnings and financial condition.

Our earnings and financial condition are dependent to a large degree upon net interest income, which is the difference between interest earned from loans and investments and interest paid on deposits and borrowings. The narrowing of interest-rate spreads, meaning the difference between the interest rates earned on loans and investments and the interest rates paid on deposits and borrowings, could adversely affect our earnings and financial condition. Interest rates are highly sensitive to many factors, including:

·   The rate of inflation;

·   The rate of economic growth;

·   Employment levels;

·   Monetary policies; and

·   Instability in domestic and foreign financial markets.

Changes in market interest rates will also affect the level of voluntary prepayments on our loans and the receipt of payments on our mortgage-backed securities resulting in the receipt of proceeds that may be reinvested at a lower rate than the loan or mortgage-backed security being prepaid.

3

We originate residential loans for sale and for our portfolio. The origination of loans for sale is designed to meet client financing needs and earn fee income. The origination of loans for sale is highly dependent upon the local real estate market and the level and trend of interest rates. Increasing interest rates may reduce the origination of loans for sale and consequently the fee income we earn. While our commercial banking, construction, and income property business lines remain a significant portion of our activities, high interest rates may reduce our mortgage-banking activities and thereby our income. In contrast, decreasing interest rates have the effect of causing clients to refinance mortgage loans faster than anticipated. This causes the value of assets related to the servicing rights on loans sold to be lower than originally anticipated. If this happens, we may need to write down our servicing assets faster, which would accelerate our expense and lower our earnings.

We consider interest rate risk one of our most significant market risks. Interest rate risk is the exposure to adverse changes in net interest income due to changes in interest rates. Consistency of our net interest revenue is largely dependent upon the effective management of interest rate risk. We employ a variety of measurement techniques to identify and manage our interest rate risk including the use of an earnings simulation model to analyze net interest income sensitivity to changing interest rates. The model is based on actual cash flows and repricing characteristics for on and off-balance sheet instruments and incorporates market-based assumptions regarding the effect of changing interest rates on the prepayment rates of certain assets and liabilities. Assumptions based on the historical behavior of deposit rates and balances in relation to changes in interest rates are also incorporated into the model. These assumptions are inherently uncertain, and as a result, the model cannot precisely measure net interest income or precisely predict the impact of fluctuations in interest rates on net interest income. Actual results will differ from simulated results due to timing, magnitude, and frequency of interest rate changes as well as changes in market conditions and management strategies.

Government Policies

Our business may be adversely affected by changes in government policies.

The earnings of banks and bank holding companies such as ours are affected by the policies of regulatory authorities, including the Federal Reserve Board, which regulates the money supply. Among the methods employed by the Federal Reserve Board are open market operations in U.S. Government securities, changes in the discount rate on member bank borrowings, and changes in reserve requirements against member bank deposits. These methods are used in varying combinations to influence overall growth and distribution of bank loans, investments and deposits, and their use may also affect interest rates charged on loans or paid on deposits. The monetary policies of the Federal Reserve Board have had a significant effect on the operating results of commercial and savings banks in the past and are expected to continue to do so in the future.

The banking industry is highly regulated and changes in federal and state banking regulations as well as policies and administration guidelines may affect our practices, growth prospects, and earnings.

Credit Risk

Our earnings and reputation may be adversely affected if we fail to effectively manage our credit risk.

Originating and underwriting loans are integral to the success of our business. This business requires us to take “credit risk,” which is the risk of losing principal and interest income because borrowers fail to repay loans. Collateral values and the ability of borrowers to repay their loans may be affected at any time by factors such as:

·   A downturn in the local economies in which we operate or the national economy;

·   A downturn in one or more of the business sectors in which our customers operate; or

·   A rapid increase in interest rates.

4

Competition

Strong competition within our market area may reduce our ability to attract and retain deposits and originate loans.

We face competition both in originating loans and in attracting deposits. Competition in the financial services industry is intense. We compete for clients by offering excellent service and competitive rates on our loans and deposit products. The type of institutions we compete with include commercial banks, savings institutions, mortgage banking firms, credit unions, finance companies, mutual funds, insurance companies and brokerage and investment banking firms. Competition arises from institutions located within and outside our market areas. As a result of their size and ability to achieve economies of scale, certain of our competitors offer a broader range of products and services than we offer. In addition, to stay competitive in our markets we may need to adjust the interest rates on our products to match the rates offered by our competitors, which could adversely affect our net interest margin. As a result, our profitability depends upon our continued ability to successfully compete in our market areas while achieving our investment objectives.

Economy

Our business may be adversely affected by downturns in the local economies on which we depend.

Our loan portfolio is concentrated primarily in eastern, northeastern, central, and south central Kentucky and southern West Virginia. Our profits depend on providing products and services to clients in these local regions. An increase in unemployment, a decrease in real estate values, or continued increases in interest rates could weaken the local economies in which we operate. Weakness in our market area could depress our earnings and consequently our financial condition because:

·   Clients may not want or need our products and services;

·   Borrowers may not be able to repay their loans;

·   The value of the collateral securing our loans to borrowers may decline; and

·   The quality of our loan portfolio may decline.

Acquisition Risk

We may have difficulty in the future continuing to grow through acquisitions.

Due to the consolidation within the banking industry, the number of suitable acquisition targets has decreased and there is intense competition for attractive acquisitions. As a result, we may experience difficulty in making acquisitions on acceptable terms.

Any future acquisitions or mergers by the Corporation or its banking subsidiary are subject to approval by the appropriate federal and state banking regulators. The banking regulators evaluate a number of criteria in making their approval decisions, such as:

·   Safety and soundness guidelines;

·   Compliance with all laws including the USA Patriot Act of 2001, the International Money Laundering Abatement and Anti-Terrorist Financing Act of 2001, the Sarbanes-Oxley Act of 2002 and the related rules and regulations promulgated under such Act or the Exchange Act, the Equal Credit Opportunity Act, the Fair Housing Act, the Community Reinvestment Act, the Home Mortgage Disclosure Act, and all other applicable fair lending laws and other laws relating to discriminatory business practices; and

·   Anti-competitive concerns with the proposed transaction.

If the banking regulators or a commenter on our regulatory application raise concerns about any of these criteria at the time a regulatory application is filed, the banking regulators may deny, delay, or condition their approval of a proposed transaction.

5

We have grown, and intend to continue to grow, through acquisitions of banks and other financial institutions. After these acquisitions, we may experience adverse changes in results of operations of acquired entities, unforeseen liabilities, asset quality problems of acquired entities, loss of key personnel, loss of clients because of change of identity, difficulties in integrating data processing and operational procedures, and deterioration in local economic conditions. These various acquisition risks can be heightened in larger transactions.

Integration Risk

We may not be able to achieve the expected integration and cost savings from our ongoing bank acquisition activities.

We have a long history of acquiring financial institutions and we expect this acquisition activity to continue in the future. Difficulties may arise in the integration of the business and operations of the financial institutions that agree to merge with and into the Corporation and, as a result, we may not be able to achieve the cost savings and synergies that we expect will result from the merger activities. Achieving cost savings is dependent on consolidating certain operational and functional areas, eliminating duplicative positions and terminating certain agreements for outside services. Additional operational savings are dependent upon the integration of the banking businesses of the acquired financial institution with that of the Corporation, including the conversion of the acquired entity’s core operating systems, data systems and products to those of the Corporation and the standardization of business practices. Complications or difficulties in the conversion of the core operating systems, data systems, and products of these other banks to those of the Corporation may result in the loss of clients, damage to our reputation within the financial services industry, operational problems, one-time costs currently not anticipated by us, and/or reduced cost savings resulting from the merger activities.

Operational Risk

An extended disruption of vital infrastructure or a security breach could negatively impact our business, results of operations, and financial condition.

Our operations depend upon, among other things, our infrastructure, including equipment and facilities. Extended disruption of vital infrastructure by fire, power loss, natural disaster, telecommunications failure, computer hacking or viruses, terrorist activity or the domestic and foreign response to such activity, or other events outside of our control could have a material adverse impact on the financial services industry as a whole and on our business, results of operations, cash flows, and financial condition in particular. Our business recovery plan may not work as intended or may not prevent significant interruption of our operations. The occurrence of any failures, interruptions, or security breaches of our information systems could damage our reputation, result in the loss of customer business, subject us to additional regulatory scrutiny, or expose us to civil litigation and possible financial liability, any of which could have an adverse effect on our financial condition and results of operation.

Market Risk

Community Trust Bancorp, Inc.'s stock price is volatile.

Our stock price has been volatile in the past, and several factors could cause the price to fluctuate substantially in the future. These factors include:

·   Actual or anticipated variations in earnings;

·   Changes in analysts' recommendations or projections;

·   The Corporation's announcements of developments related to our businesses;

·   Operating and stock performance of other companies deemed to be peers;

·   New technology used or services offered by traditional and non-traditional competitors; and

·   News reports of trends, concerns, and other issues related to the financial services industry.

6

Our stock price may fluctuate significantly in the future, and these fluctuations may be unrelated to the Corporation's performance. General market price declines or market volatility in the future could adversely affect the price of our common stock, and the current market price may not be indicative of future market prices.

Item 1B. Unresolved Staff Comments

None.

7

SELECTED STATISTICAL INFORMATION

The following tables set forth certain statistical information relating to our Corporation and subsidiaries on a consolidated basis and should be read together with our consolidated financial statements.

Consolidated Average Balance Sheets and Taxable Equivalent Income/Expense and Yields/Rates

	2006							2005							2004
(in thousands)		Average Balances			Interest	Average Rate			Average Balances			Interest	Average Rate			Average Balances			Interest	Average Rate
Earning assets:
Loans (1)(2)(3)	$	2,131,649		$	163,526	7.67	%	$	2,024,756		$	137,602	6.80	%	$	1,816,146		$	111,417	6.13	%
Loans held for sale		1,685			130	7.72			1,135			131	11.54			1,498			151	10.08
Securities:
U.S. Treasury and agencies		312,611			13,520	4.32			391,810			15,984	4.08			333,654			13,520	4.05
Tax exempt state and political subdivisions (3)		49,173			3,175	6.46			50,995			3,237	6.35			53,179			3,391	6.38
Other securities		125,937			5,396	4.28			46,687			1,572	3.37			62,703			1,796	2.86
Federal Reserve Bank and Federal Home Loan Bank stock		27,176			1,588	5.84			25,673			1,337	5.21			24,548			1,093	4.45
Federal funds sold		66,422			3,346	5.04			57,394			1,849	3.22			44,960			596	1.33
Interest bearing deposits		811			38	4.69			993			26	2.62			852			11	1.29
Total earning assets		2,715,464		$	190,719	7.02	%		2,599,443		$	161,738	6.22	%		2,337,540		$	131,975	5.65	%
Allowance for loan and lease losses		(28,622	)						(29,236	)						(26,380	)
		2,686,842							2,570,207							2,311,160
Nonearning assets:
Cash and due from banks		78,069							78,251							74,112
Premises and equipment, net		56,846							55,480							50,941
Other assets		121,135							113,611							108,920
Total assets	$	2,942,892						$	2,817,549						$	2,545,133
Interest bearing liabilities:
Deposits:
Savings and demand deposits	$	664,959		$	15,399	2.32	%	$	624,908		$	8,787	1.41	%	$	621,543		$	5,360	0.86	%
Time deposits		1,194,409			48,457	4.06			1,169,680			34,225	2.93			1,077,795			23,100	2.14
Repurchase agreements and federal funds purchased		185,098			8,620	4.66			118,906			3,819	3.21			93,281			1,496	1.60
Other short-term borrowings		0			0	0.00			0			0	0.00			688			72	10.47
Advances from Federal Home Loan Bank		108,355			3,648	3.37			152,823			4,872	3.19			63,546			1,907	3.00
Long-term debt		61,341			5,414	8.83			61,341			5,414	8.83			61,341			5,414	8.83
Total interest bearing liabilities		2,214,162		$	81,538	3.68	%		2,127,658		$	57,117	2.68	%		1,918,194		$	37,349	1.95	%
Noninterest bearing liabilities:
Demand deposits		435,017							423,147							379,353
Other liabilities		24,511							20,625							18,025
Total liabilities		2,673,690							2,571,430							2,315,572
Shareholders’ equity		269,202							246,119							229,561
Total liabilities and shareholders’ equity	$	2,942,892						$	2,817,549						$	2,543,133
Net interest income				$	109,181						$	104,621						$	94,626
Net interest spread						3.34	%						3.54	%						3.70	%
Benefit of interest free funding						0.68	%						0.48	%						0.36	%
Net interest margin						4.02	%						4.02	%						4.06	%

(1) Interest includes fees on loans of $1,500, $2,841, and $2,646 in 2006, 2005, and 2004, respectively.

(2) Loan balances are net of unearned income and include principal balances on nonaccrual loans.

(3) Tax exempt income on securities and loans is reported on a fully taxable equivalent basis using a 35% rate.

8

Net Interest Differential

The following table illustrates the approximate effect of volume and rate changes on net interest differentials between 2006 and 2005 and also between 2005 and 2004.

	Total Change			Change Due to						Total Change			Change Due to
(in thousands)		2006/2005			Volume			Rate			2005/2004			Volume			Rate
Interest income
Loans	$	25,924		$	7,536		$	18,388		$	26,185		$	13,509		$	12,676
Loans held for sale		(1	)		51			(52	)		(20	)		(33	)		13
U.S. Treasury and agencies		(2,464	)		(3,081	)		617			2,464			2,372			92
Tax exempt state and political subdivisions		(62	)		(114	)		52			(154	)		(140	)		(14	)
Other securities		3,824			3,295			529			(224	)		(411	)		187
Federal Reserve Bank and Federal Home Loan Bank stock		251			81			170			244			52			192
Federal funds sold		1,497			327			1,170			1,253			203			1,050
Interest bearing deposits		12			(4	)		16			15			2			13
Total interest income		28,981			8,351			20,630			29,763			15,467			14,296
Interest expense
Savings and demand deposits		6,612			596			6,016			3,427			29			3,398
Time deposits		14,232			738			13,494			11,125			2,105			9,020
Repurchase agreements and federal funds purchased		4,801			2,655			2,146			2,323			500			1,823
Other short-term borrowings		0			0			0			(72	)		0			(72	)
Advances from Federal Home Loan Bank		(1,224	)		(1,351	)		127			2,965			2,839			126
Total interest expense		24,421			2,638			21,783			19,768			5,473			14,295
Net interest income	$	4,560		$	5,713		$	(1,153	)	$	9,995		$	9,994		$	1

For purposes of the above table, changes which are due to both rate and volume are allocated based on a percentage basis, using the absolute values of rate and volume variance as a basis for percentages. Income is stated at a fully taxable equivalent basis, assuming a 35% tax rate.

Investment Portfolio

The maturity distribution and weighted average interest rates of securities at December 31, 2006 are as follows:

Available-for-sale

	Estimated Maturity at December 31, 2006
	Within 1 Year				1-5 Years				5-10 Years				After 10 Years				Total Fair Value				Amortized Cost
(in thousands)		Amount	Yield			Amount	Yield			Amount	Yield			Amount	Yield			Amount	Yield			Amount
U.S. Treasury, government agencies, and government sponsored agencies	$	387	6.58	%	$	168,747	4.46	%	$	90,303	4.71	%	$	644	5.15	%	$	260,081	4.55	%	$	265,329
State and municipal obligations		4,039	6.88	%		27,303	6.56	%		14,220	6.47	%		0	0.00	%		45,562	6.56	%		44,887
Other securities		1	7.75	%		19,557	4.29	%		0	0.00	%		100,650	4.40	%		120,208	4.38	%		120,651
Total	$	4,427	6.85	%	$	215,607	4.71	%	$	104,523	4.95	%	$	101,294	4.40	%	$	425,851	4.72	%	$	430,867

9

Held-to-maturity

	Estimated Maturity at December 31, 2006
	Within 1 Year				1-5 Years				5-10 Years				After 10 Years				Total Amortized Cost				Fair Value
(in thousands)		Amount	Yield			Amount	Yield			Amount	Yield			Amount	Yield			Amount	Yield			Amount
U.S. Treasury, government agencies, and government sponsored agencies	$	0	0.00	%	$	37,440	3.75	%	$	0	0.00	%	$	0	0.00	%	$	37,440	3.75	%	$	36,183
State and municipal obligations		770	6.30	%		785	6.81	%		0	0.00	%		1,513	5.96	%		3,068	6.26	%		2,832
Total	$	770	6.30	%	$	38,225	3.81	%	$	0	0.00	%	$	1,513	5.96	%	$	40,508	3.94	%	$	39,015
Total securities	$	5,197	6.77	%	$	253,832	4.57	%	$	104,523	4.95	%	$	130,834	4.76	%	$	494,386	4.73	%

The calculations of the weighted average interest rates for each maturity category are based upon yield weighted by the respective costs of the securities. The weighted average rates on state and political subdivisions are computed on a taxable equivalent basis using a 35% tax rate. For purposes of the above presentation, maturities of mortgage-backed pass through certificates and collateralized mortgage obligations are based on estimated maturities.

Excluding those holdings of the investment portfolio in U.S. Treasury securities and other agencies of the U.S. Government, there were no securities of any one issuer that exceeded 10% of our shareholders’ equity at December 31, 2006.

The book values of securities available-for-sale and securities held-to-maturity as of December 31, 2006 and 2005 are presented in note 4 to the consolidated financial statements.

The book value of securities at December 31, 2004 is presented below:

(in thousands)		Available-for-Sale		Held-to-Maturity
U.S. Treasury and government agencies	$	1,004	$	500
State and political subdivisions		49,435		3,285
U.S. government sponsored agencies and mortgage-backed pass through certificates		378,834		58,886
Collateralized mortgage obligations		2,394		0
Other debt securities		9,835		0
Total debt securities		441,502		62,671
Marketable equity securities		15,700		0
Total securities	$	457,202	$	62,671

10

Loan Portfolio

(in thousands)		2006			2005			2004			2003			2002
Commercial:
Construction	$	133,902		$	115,721		$	75,078		$	67,147		$	66,797
Secured by real estate		632,881			665,911			613,059			583,924			509,856
Other		337,075			301,828			276,921			256,837			280,492
Total commercial		1,103,858			1,083,460			965,058			907,908			857,145
Real estate construction		50,588			51,232			30,456			32,495			23,311
Real estate mortgage		579,197			542,809			499,410			413,939			377,109
Consumer		422,291			414,920			395,588			368,578			366,493
Equipment lease financing		11,524			14,923			12,007			13,340			10,549
Total loans	$	2,167,458		$	2,107,344		$	1,902,519		$	1,736,260		$	1,634,607
Percent of total year-end loans
Commercial:
Construction		6.18	%		5.49	%		3.95	%		3.87	%		4.08	%
Secured by real estate		29.20			31.60			32.22			33.63			31.19
Other		15.55			14.32			14.56			14.79			17.16
Total commercial		50.93			51.41			50.73			52.29			52.43
Real estate construction		2.34			2.43			1.60			1.87			1.43
Real estate mortgage		26.72			25.76			26.25			23.84			23.07
Consumer		19.48			19.69			20.79			21.23			22.42
Equipment lease financing		0.53			0.71			0.63			0.77			0.65
Total loans		100.00	%		100.00	%		100.00	%		100.00	%		100.00	%

The total loans above are net of unearned income.

The following table shows the amounts of loans (excluding residential mortgages of 1-4 family residences, consumer loans, and lease financing) which, based on the remaining scheduled repayments of principal are due in the periods indicated. Also, the amounts are classified according to sensitivity to changes in interest rates (fixed, variable).

	Maturity at December 31, 2006
(in thousands)		Within One Year		After One but Within Five Years		After Five Years		Total
Commercial secured by real estate and commercial other	$	247,604	$	314,537	$	407,815	$	969,956
Commercial and real estate construction		123,106		21,393		39,991		184,490
	$	370,710	$	335,930	$	447,806	$	1,154,446
Rate sensitivity:
Predetermined rate	$	72,948	$	99,373	$	28,491	$	200,812
Adjustable rate		297,762		236,557		419,315		953,634
	$	370,710	$	335,930	$	447,806	$	1,154,446

11

Nonperforming Assets

(in thousands)		2006			2005			2004			2003			2002
Nonaccrual loans	$	9,863		$	12,219		$	13,808		$	9,705		$	19,649
Restructured loans		66			899			974			1,726			276
90 days or more past due and still accruing interest		4,294			8,284			5,319			5,463			2,814
Total nonperforming loans		14,223			21,402			20,101			16,894			22,739
Foreclosed properties		4,524			5,410			4,756			6,566			2,761
Total nonperforming assets	$	18,747		$	26,812		$	24,857		$	23,460		$	25,500
Nonperforming assets to total loans and foreclosed properties		0.86	%		1.27	%		1.30	%		1.35	%		1.56	%
Allowance to nonperforming loans		193.54	%		137.87	%		134.41	%		145.93	%		102.34	%

Nonaccrual, Past Due, and Restructured Loans

(in thousands)		Nonaccrual loans	As a % of Loan Balances by Category			Restructured Loans	As a % of Loan Balances by Category			Accruing Loans Past Due 90 Days or More	As a % of Loan Balances by Category			Balances
December 31, 2006
Commercial construction	$	430	0.32	%	$	0	0.00	%	$	283	0.21	%	$	133,902
Commercial secured by real estate		3,631	0.57			0	0.00			938	0.15			632,881
Commercial other		3,227	0.96			0	0.00			873	0.26			337,075
Consumer real estate construction		361	0.71			66	0.13			405	0.80			50,588
Consumer real estate secured		2,212	0.38			0	0.00			1,507	0.26			579,197
Consumer other		2	0.00			0	0.00			288	0.07			422,291
Equipment lease financing		0	0.00			0	0.00			0	0.00			11,524
Total	$	9,863	0.46	%	$	66	0.00	%	$	4,294	0.20	%	$	2,167,458
December 31, 2005
Commercial construction	$	0	0.00	%	$	0	0.00	%	$	0	0.00	%	$	115,721
Commercial secured by real estate		4,150	0.62			819	0.12			4,706	0.71			665,911
Commercial other		3,918	1.30			80	0.03			858	0.28			301,828
Consumer real estate construction		112	0.22			0	0.00			172	0.34			51,232
Consumer real estate secured		4,032	0.74			0	0.00			1,970	0.36			542,809
Consumer other		7	0.00			0	0.00			578	0.14			414,920
Equipment lease financing		0	0.00			0	0.00			0	0.00			14,923
Total	$	12,219	0.58	%	$	899	0.04	%	$	8,284	0.39	%	$	2,107,344

In 2006, gross interest income that would have been recorded on nonaccrual loans had the loans been current in accordance with their original terms amounted to $1.0 million. Interest income actually received and included in net income for the period was $0.2 million, leaving $0.8 million of interest income not recognized during the period.

12

Discussion of the Nonaccrual Policy

The accrual of interest income on loans is discontinued when the collection of interest and principal in full is not expected. When interest accruals are discontinued, interest income accrued in the current period is reversed and interest income accrued in prior periods is charged to the allowance for loan and lease losses. Any loans past due 90 days or more must be well secured and in the process of collection to continue accruing interest.

Potential Problem Loans

Interest accrual is discontinued when we believe, after considering economic and business conditions, collateral value, and collection efforts, that the borrower’s financial condition is such that collection of interest is doubtful.

Foreign Outstandings

None

Loan Concentrations

We had no concentration of loans exceeding 10% of total loans at December 31, 2006. See note 18 to the consolidated financial statements for further information.

13

Analysis of the Allowance for Loan and Lease Losses

(in thousands)		2006		2005			2004		2003		2002
Allowance for loan and lease losses, beginning of year	$	29,506	$	27,017		$	24,653	$	23,271	$	23,648
Loans charged off:
Commercial construction		23		56			339		164		662
Commercial secured by real estate		872		826			1,135		773		2,386
Commercial other		3,816		4,233			2,331		4,085		3,393
Real estate construction		56		10			20		0		0
Real estate mortgage		572		746			683		957		1,098
Consumer		4,091		5,097			5,080		5,725		6,598
Equipment lease financing		0		0			0		0		0
Total charge-offs		9,430		10,968			9,588		11,704		14,137
Recoveries of loans previously charged off:
Commercial construction		0		0			1		32		0
Commercial secured by real estate		132		94			301		243		156
Commercial other		689		766			382		450		207
Real estate construction		0		20			0		0		0
Real estate mortgage		210		310			244		159		107
Consumer		2,114		2,223			2,376		2,870		3,204
Equipment lease financing		0		0			0		0		0
Total recoveries		3,145		3,413			3,304		3,754		3,674
Net charge-offs:
Commercial construction		23		56			338		132		662
Commercial secured by real estate		740		732			834		530		2,230
Commercial other		3,127		3,467			1,949		3,635		3,186
Real estate construction		56		(10	)		20		0		0
Real estate mortgage		362		436			439		798		991
Consumer		1,977		2,874			2,704		2,855		3,394
Equipment lease financing		0		0			0		0		0
Total net charge-offs		6,285		7,555			6,284		7,950		10,463
Provisions charged against operations		4,305		8,285			8,648		9,332		10,086
Allowance of acquired bank		0		1,759			0		0		0
Balance, end of year	$	27,526	$	29,506		$	27,017	$	24,653	$	23,271
Allocation of allowance, end of year:
Commercial construction	$	2,059	$	1,799		$	1,123	$	2,623	$	615
Commercial secured by real estate		7,224		10,354			8,285		7,010		4,109
Commercial other		4,335		4,693			3,745		1,392		2,088
Real estate construction		206		159			107		1,034		124
Real estate mortgage		2,352		1,677			1,435		741		1,592
Consumer		4,288		4,602			3,104		3,341		3,987
Equipment lease financing		126		232			168		160		88
Unallocated		6,936		5,990			9,050		8,352		10,668
Balance, end of year	$	27,526	$	29,506		$	27,017	$	24,653	$	23,271
Average loans outstanding, net of unearned interest	$	2,131,649	$	2,024,756		$	1,816,146	$	1,658,289	$	1,660,912
Loans outstanding at end of year, net of unearned interest		2,167,458		2,107,344			1,902,519		1,736,260		1,634,607

14

Analysis of the Allowance for Loan and Lease Losses (cont.)

	2006			2005			2004			2003			2002
Net charge-offs to average loan type:
Commercial construction		0.02	%		0.06	%		0.47	%		0.19	%		0.94	%
Commercial secured by real estate		0.11			0.11			0.14			0.10			0.44
Commercial other		0.99			1.18			0.76			1.29			1.12
Real estate construction		0.11			(0.03	)		0.06			0.00			0.00
Real estate mortgage		0.06			0.08			0.09			0.20			0.25
Consumer		0.48			0.71			0.70			0.79			0.90
Equipment lease financing		0.00			0.00			0.00			0.00			0.00
Total		0.29	%		0.37	%		0.35	%		0.48	%		0.63	%
Other ratios:
Allowance to net loans, end of year		1.27	%		1.40	%		1.42	%		1.42	%		1.42	%
Provision for loan losses to average loans		0.20			0.41			0.48			0.56			0.61

The allowance for loan and lease losses balance is maintained by management at a level considered adequate to cover anticipated probable losses based on past loss experience, general economic conditions, information about specific borrower situations including their financial position and collateral values, and other factors and estimates which are subject to change over time. This analysis is completed quarterly and forms the basis for allocation of the loan loss reserve and what charges to the provision may be required. See note 1 to the consolidated financial statements for further information.

Average Deposits and Other Borrowed Funds

(in thousands)	2006		2005		2004
Deposits:
Noninterest bearing deposits	$	435,017	$	423,147	$	379,353
NOW accounts		18,338		16,486		15,374
Money market accounts		437,707		383,900		382,147
Savings accounts		208,914		224,522		224,022
Certificates of deposit of $100,000 or more		417,671		409,866		357,994
Certificates of deposit < $100,000 and other time deposits		776,738		759,814		719,801
Total deposits		2,294,385		2,217,735		2,078,691
Other borrowed funds:
Repurchase agreements and federal funds purchased		185,098		118,906		93,281
Other short-term borrowings		0		0		688
Advances from Federal Home Loan Bank		108,355		152,823		63,546
Long-term debt		61,341		61,341		61,341
Total other borrowed funds		354,794		333,070		218,856
Total deposits and other borrowed funds	$	2,649,179	$	2,550,805	$	2,297,547

The maximum balance for federal funds purchased and repurchase agreements at any month-end during 2006 occurred at May 31, 2006, with a month-end balance of $220.2 million. The maximum balance for federal funds purchased and repurchase agreements at any month-end during 2005 occurred at December 31, 2005, with a month-end balance of $146.6 million. The maximum balance for federal funds purchased and repurchase agreements at any month-end during 2004 occurred at February 29, 2004, with a month-end balance of $117.1 million.

15

Maturities and/or repricing of time deposits of $100,000 or more outstanding at December 31, 2006 are summarized as follows:

(in thousands)	Certificates of Deposit		Other Time Deposits		Total
Three months or less	$	125,153	$	4,954	$	130,107
Over three through six months		80,987		6,262		87,249
Over six through twelve months		193,155		10,003		203,158
Over twelve through sixty months		38,785		5,605		44,390
	$	438,080	$	26,824	$	464,904

Item 2. Properties

Our main office, which is owned by the Bank, is located at 346 North Mayo Trail, Pikeville, Kentucky 41501. Following is a schedule of properties owned and leased by the Corporation and its subsidiaries as of December 31, 2006:

Location			Owned	Leased	Total
Banking locations:
Community Trust Bank, Inc.
l	Pikeville Market (lease land to 3 owned locations)		9	1	10
		10 locations in Pike County, Kentucky
	Floyd/Knott/Johnson Market (lease land to 1 owned location)		3	1	4
		2 locations in Floyd County, Kentucky, 1 location in Knott County, Kentucky, and 1 location in Johnson County, Kentucky
	Tug Valley Market (lease land to 1 owned location)		2	0	2
		1 location in Pike County, Kentucky, 1 location in Mingo County, West Virginia
	Whitesburg Market		4	1	5
		5 locations in Letcher County, Kentucky
	Hazard Market (lease land to 2 owned locations)		4	0	4
		4 locations in Perry County, Kentucky
l	Lexington Market (lease land to 2 owned locations)		3	3	6
		6 locations in Fayette County, Kentucky
	Winchester Market		1	2	3
		3 locations in Clark County, Kentucky
	Richmond Market (lease land to 1 owned location)		3	1	4
		4 locations in Madison County, Kentucky
	Mt. Sterling Market		2	0	2
		2 locations in Montgomery County, Kentucky
l	Versailles Market (lease land to 1 owned location)		2	3	5
		2 locations in Woodford County, Kentucky, 2 locations in Franklin County, Kentucky, and 1 location in Scott County, Kentucky
	Danville Market (lease land to 1 owned location)		3	0	3
		2 locations in Boyle County, Kentucky and 1 location in Mercer County, Kentucky
l	Ashland Market (lease land to 1 owned location)		5	0	5
		4 locations in Boyd County, Kentucky and 1 location in Greenup County, Kentucky
	Flemingsburg Market		4	0	4
		4 locations in Fleming County, Kentucky
	Advantage Valley Market		3	0	3
		2 locations in Lincoln County, West Virginia and 1 location in Wayne County, West Virginia
	Summersville Market		1	0	1
		1 location in Nicholas County, West Virginia

16

Location			Owned	Leased	Total
l	Middlesboro Market (lease land to 1 owned location)		3	0	3
		3 locations in Bell County, Kentucky
	Williamsburg Market		5	0	5
		2 locations in Whitley County, Kentucky and 3 locations in Laurel County, Kentucky
	Campbellsville Market (lease land to 2 owned locations)		8	0	8
		2 locations in Taylor County, Kentucky, 2 locations in Pulaski County, Kentucky, 1 location in Adair County, Kentucky, 1 location in Green County, Kentucky, 1 location in Russell County, Kentucky, and 1 location in Marion County, Kentucky
	Mt. Vernon Market		2	0	2
		2 locations in Rockcastle County, Kentucky
Total banking locations			67	12	79
Operational locations:
Community Trust Bank, Inc.
	Pikeville (Pike County, Kentucky) (lease land to 1 location)		1	0	1
	Lexington (Fayette County, Kentucky)		0	1	1
Total operational locations			1	1	2
Other:
Community Trust Bank, Inc.
	Ashland (Boyd County, Kentucky)		0	1	1
Total other locations			0	1	1
Total locations			68	14	82

lCommunity Trust and Investment Company has leased offices in the main office locations in these markets.

See notes 9 and 15 to the consolidated financial statements included herein for the year ended December 31, 2006, for additional information relating to lease commitments and amounts invested in premises and equipment.

Item 3. Legal Proceedings

Our Corporation and subsidiaries, and from time to time, our officers, are named defendants in legal actions arising from ordinary business activities. Management, after consultation with legal counsel, believes any pending actions are without merit or that the ultimate liability, if any, will not materially affect our consolidated financial position or results of operations.

Item 4. Submission of Matters to a Vote of Security Holders

There were no matters submitted to a vote of security holders, through solicitation of proxies or otherwise, during the fourth quarter of 2006.

17

Executive Officers of the Registrant

Set forth below are the executive officers of our Corporation at December 31, 2006, their positions with the Corporation, and the year in which they first became an executive officer or director.

Name and Age (1)	Positions and Offices Currently Held	Date First Became Director or Executive Officer		Principal Occupation
Jean R. Hale; 60	Chairman, President and CEO	1992	(2)	Chairman, President and CEO of Community Trust Bancorp, Inc.
Mark A. Gooch; 48	Executive Vice President and Secretary	1997	(3)	President and CEO of Community Trust Bank, Inc.
Tracy Little; 66	Executive Vice President	2003	(4)	President and CEO of Community Trust and Investment Company
Michael S. Wasson; 55	Executive Vice President	2000	(5)	Executive Vice President/ Central Kentucky Region President of Community Trust Bank, Inc.
James B. Draughn; 47	Executive Vice President	2001	(6)	Executive Vice President/Operations of Community Trust Bank, Inc.
Kevin J. Stumbo; 46	Executive Vice President and Treasurer	2002	(7)	Executive Vice President/ Controller of Community Trust Bank, Inc.
Ricky D. Sparkman; 44	Executive Vice President	2002	(8)	Executive Vice President/ South Central Region President of Community Trust Bank, Inc.
Richard W. Newsom; 52	Executive Vice President	2002	(9)	Executive Vice President/ Eastern Region President of Community Trust Bank, Inc.
James J. Gartner; 65	Executive Vice President	2002	(10)	Executive Vice President/ Chief Credit Officer of Community Trust Bank, Inc.
Larry W. Jones; 60	Executive Vice President	2002	(11)	Executive Vice President/ Northeast Region President of Community Trust Bank, Inc.
Steven E. Jameson; 50	Executive Vice President	2004	(12)	Executive Vice President/ Chief Internal Audit & Risk Officer

(1)The ages listed for the Corporation's executive officers are as of February 28, 2007.

(2)Ms. Hale assumed the position of Chairman of the Board effective December 31, 2004.

(3)Mr. Gooch was named Secretary of the Corporation effective April 26, 2005.

18

(4) Mr. Little began employment with the Corporation on August 4, 2003. Prior to joining the Corporation, Mr. Little served for three years in Sarasota, Florida as Vice President of Fisher Investments, Inc., a $10 billion private investment firm headquartered in Woodside, California. For the two years prior, he served as Senior Vice President and Executive Officer in charge of the private client group of Provident Bank of Florida. Mr. Little has thirty-eight years in the trust and banking business and has been the executive in charge of five different trust departments and trust companies.

(5) Mr. Wasson was employed by Mercantile Bancorporation for 16 years prior to joining the Corporation in 2000. Mr. Wasson served as President of Mercantile Bank of Western Missouri, President of Mercantile Bank of Southern Illinois, and most recently as Chief Operating Officer of Mercantile Bank Midwest.

(6) Mr. Draughn served as Technology Manager for the Bank for seven years, most recently as Senior Vice President/Technology, prior to being promoted to Executive Vice President/Operations.

(7) Mr. Stumbo served as Senior Vice President/Controller for the Bank for five years prior to being promoted to Executive Vice President/Controller. Mr. Stumbo was named Treasurer of the Corporation effective April 26, 2005. Mr. Stumbo has been a Certified Public Accountant since 1985.

(8) Mr. Sparkman served as Vice President/Commercial Lending prior to being promoted to Market President in January 2000. In 2002, Mr. Sparkman was promoted to Executive Vice President and South Central Region President.

(9) Mr. Newsom served as Senior Vice President of Consumer Lending for five years prior to being promoted to Executive Vice President and Eastern Region President of Community Trust Bank, Inc.

(10) Mr. Gartner was employed for two years as Executive Vice President/Risk Management by Hamilton Bank, N.A., Miami, Florida, with assets of $1.2 billion prior to joining the Corporation. Prior to accepting his position at Hamilton Bank, Mr. Gartner was employed as Executive Vice President/Risk Manager, Chief Credit Officer, and Director at First National Bank of Nevada Holding Company. For two months in 1998, Mr. Gartner served as Executive Vice President/Merger Liaison Officer at Norwest Bank Arizona which purchased the Bank of Arizona and The Bank of New Mexico where Mr. Gartner served as Executive Vice President/Risk Management, Chief Credit Officer, and Director of the Bank of Arizona for the two years prior.

(11) Mr. Jones was employed by AmSouth Bancorp, a $35 billion financial services corporation, as District/City President for three years prior to joining the Corporation. Mr. Jones was employed by First American National Bank as Division Manager for north Mississippi for one year prior to its merger with AmSouth in 1999. For the thirty years prior, Mr. Jones was employed by Deposit Guaranty National Bank, formerly Security State Bank, prior to its merger with First American National Bank most recently as President/Community Bank.

(12) Mr. Jameson is a non-voting member of the Executive Committee. Mr. Jameson served as Lead Auditing Specialist for The World Bank Group in Washington, D.C. for one year prior to joining the Corporation in April 2004. For the four years prior, Mr. Jameson was employed by The Institute of Internal Auditors, Inc. in Altamonte Springs, Florida as Assistant Vice President of the Professional Practices Group. Mr. Jameson's certifications include Certified Public Accountant, Certified Internal Auditor, Certified Bank Auditor, Certified Fraud Examiner, Certified Financial Services Auditor, and Certification in Control Self-Assessment.

PART II

Item 5. Market for the Registrant’s Common Equity, Related Shareholder Matters, and Issuer Repurchases of Equity Securities

Our common stock is listed on The NASDAQ-Stock Market LLC - Global Select Market under the symbol CTBI. Additional information required by this item is included in the Quarterly Financial Data below:

19

Quarterly Financial Data

(Unaudited)

(in thousands except per share amounts)
Three Months Ended	December 31			September 30			June 30			March 31
2006
Net interest income	$	26,698		$	27,425		$	27,166		$	26,318
Net interest income, taxable equivalent basis		27,095			27,821			27,557			26,708
Provision for loan losses		1,200			1,755			1,350			0
Noninterest income		8,612			8,231			8,094			7,782
Noninterest expense		20,506			19,957			19,867			20,077
Net income		9,520			9,884			9,892			9,768
Per common share:
Basic earnings per share	$	0.63		$	0.65		$	0.66		$	0.65
Diluted earnings per share		0.62			0.64			0.65			0.64
Dividends declared		0.27			0.26			0.26			0.26
Common stock price:
High	$	42.59		$	39.07		$	35.50		$	35.90
Low		36.51			33.62			31.50			30.60
Last trade		41.53			37.65			34.93			33.90
Selected ratios:
Return on average assets, annualized		1.28	%		1.34	%		1.33	%		1.36	%
Return on average common equity, annualized		13.45			14.40			15.02			15.27
Net interest margin, annualized		3.94			4.08			4.07			4.07
2005
Net interest income	$	26,950		$	26,707		$	25,049		$	24,339
Net interest income, taxable equivalent basis		27,344			27,099			25,442			24,736
Provision for loan losses		2,748			2,470			1,700			1,367
Noninterest income		8,596			8,708			8,578			7,745
Noninterest expense		19,888			19,790			19,684			19,207
Net income		8,890			9,083			8,478			7,961
Per common share:
Basic earnings per share	$	0.59		$	0.61		$	0.57		$	0.54
Diluted earnings per share		0.58			0.60			0.56			0.53
Dividends declared		0.26			0.24			0.24			0.24
Common stock price:
High	$	34.69		$	35.01		$	33.78		$	32.90
Low		30.12			30.77			27.94			28.00
Last trade		30.75			32.18			32.72			28.81
Selected ratios:
Return on average assets, annualized		1.23	%		1.26	%		1.21	%		1.18	%
Return on average common equity, annualized		13.94			14.50			13.96			13.50
Net interest margin, annualized		4.12			4.08			3.94			3.96

There were approximately 3,000 holders of record of our outstanding common shares at February 28, 2007.

20

Dividends

The annual dividend paid to our stockholders was increased from $0.98 per share to $1.05 per share during 2006. We have adopted a conservative policy of cash dividends by maintaining an average annual cash dividend ratio of less than 45%, with periodic stock dividends. Dividends are typically paid on a quarterly basis. Future dividends are subject to the discretion of our Corporation’s Board of Directors, cash needs, general business conditions, dividends from our subsidiaries, and applicable governmental regulations and policies. For information concerning restrictions on dividends from the subsidiary bank to the Corporation, see note 20 to the consolidated financial statements included herein for the year ended December 31, 2006.

Stock Repurchases

We did not acquire any shares of stock through the stock repurchase program during the years 2005 and 2006. The maximum number of shares that may yet be purchased under the program is 578,519. For further information, see the Liquidity and Market Risk section of Item 7.Management’s Discussion and Analysis of Financial Condition and Results of Operations.

21

Item 6. Selected Financial Data 2002-2006

(in thousands except per share amounts)
Year Ended December 31	2006			2005			2004			2003			2002
Interest income	$	189,145		$	160,162		$	130,401		$	128,514		$	146,550
Interest expense		81,538			57,117			37,349			43,935			57,293
Net interest income		107,607			103,045			93,052			84,579			89,257
Provision for loan losses		4,305			8,285			8,648			9,332			10,086
Noninterest income		32,719			33,627			34,077			36,412			27,928
Noninterest expense		80,407			78,569			74,595			70,735			67,341
Income before income taxes		55,614			49,818			43,886			40,924			39,758
Income taxes		16,550			15,406			12,936			12,033			12,158
Net income	$	39,064		$	34,412		$	30,950		$	28,891		$	27,600
Per common share:
Basic earnings per share	$	2.59		$	2.31		$	2.09		$	1.95		$	1.83
Cash dividends declared-	$	1.05		$	0.98		$	0.87		$	0.75		$	0.65
as a % of net income		40.54	%		42.42	%		41.63	%		38.46	%		35.52	%
Book value, end of year	$	18.63		$	16.93		$	15.91		$	14.95		$	14.02
Market price, end of year	$	41.53		$	30.75		$	32.36		$	27.46		$	20.78
Market to book value, end of year		2.23	x		1.82	x		2.03	x		1.84	x		1.48	x
Price/earnings ratio, end of year		16.03	x		13.31	x		15.48	x		14.08	x		11.36	x
Cash dividend yield, end of year		2.53	%		3.19	%		2.69	%		2.73	%		3.13	%
At year-end:
Total assets	$	2,969,761		$	2,851,053		$	2,710,935		$	2,475,880		$	2,487,911
Long-term debt		61,341			61,341			61,341			61,341			60,604
Shareholders’ equity		282,375			253,945			236,169			221,393			209,419
Averages:
Assets	$	2,942,892		$	2,817,549		$	2,545,133		$	2,494,147		$	2,467,469
Deposits		2,294,385			2,217,735			2,078,691			2,109,752			2,110,714
Earning assets		2,715,464			2,599,443			2,337,540			2,292,251			2,268,579
Loans		2,131,649			2,024,756			1,816,146			1,658,289			1,660,912
Shareholders’ equity		269,202			246,119			229,561			215,086			202,562
Profitability ratios:
Return on average assets		1.33	%		1.22	%		1.22	%		1.16	%		1.12	%
Return on average equity		14.51	%		13.98	%		13.48	%		13.43	%		13.63	%
Capital ratios:
Equity to assets, end of year		9.51	%		8.91	%		8.71	%		8.94	%		8.42	%
Average equity to average assets		9.15	%		8.74	%		9.02	%		8.62	%		8.21	%
Risk based capital ratios:
Tier 1 capital
(to average assets)		9.58	%		8.94	%		8.78	%		8.73	%		8.23	%
Tier 1 capital
(to risk weighted assets)		12.21	%		11.52	%		11.82	%		11.35	%		10.98	%
Total capital
(to risk weighted assets)		13.43	%		12.76	%		13.07	%		12.60	%		12.22	%
Other significant ratios:
Allowance to net loans, end of year		1.27	%		1.40	%		1.42	%		1.42	%		1.42	%
Allowance to nonperforming loans, end of year		193.54	%		137.87	%		134.41	%		145.93	%		102.34	%
Nonperforming assets to loans and foreclosed properties, end of year		0.86	%		1.27	%		1.30	%		1.35	%		1.56	%

22

(in thousands except per share amounts)
Year Ended December 31	2006			2005			2004			2003			2002
Net interest margin		4.02	%		4.02	%		4.06	%		3.76	%		4.02	%
Other statistics:
Average common shares outstanding		15,086			14,908			14,811			14,821			15,095
Number of full-time equivalent employees, end of year		1,021			1,003			954			901			874

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Overview

Community Trust Bancorp, Inc. reported record earnings for the year ended December 31, 2006 of $39.1 million or $2.59 per basic share. Our basic earnings per share for the year 2006 increased 12.1% compared to 2005 while our net income increased 13.5%. The increase in net income was primarily driven by a $4.6 million increase in our net interest revenue and a $4.0 million decrease in provision for loan losses.

Our year-to-date net interest margin remained flat from prior year at 4.02%. As anticipated, when interest rates stabilized in the latter part of the year, we experienced margin pressure which is reflected in the decrease in the fourth quarter net interest margin of 18 basis points from prior year and 14 basis points from prior quarter.

Our total assets at December 31, 2006 increased 4.2% over December 31, 2005. Asset growth during 2006 was all organic and included the reduction of $40 million in the investment portfolio during the third quarter resulting from the payoff of a maturing Federal Home Loan Bank advance. Our loan portfolio grew at a rate of 2.9%, while deposits, including repurchase agreements, grew 5.3% from prior year end. The deposit growth in excess of loan growth was invested in our investment portfolio and federal funds sold. Federal funds sold almost doubled year over year with an increase of $31.0 million, while the investment portfolio increased 5.0% or $22.3 million year over year.

Shareholders’ equity of $282.4 million on December 31, 2006 was an 11.2% increase from the $253.9 million on December 31, 2005.

Asset quality continues to improve as evidenced by nonperforming loans as a percentage of total loans at December 31, 2006 of 0.66%, a 36 basis point decrease from December 31, 2005. As a result of the improvement in credit quality trends, provision for loan losses for the year ended December 31, 2006 decreased to $4.3 million compared to $8.3 million for the same period last year.

Return on average assets for the year 2006 was 1.33%, a 9.0% increase from prior year. Our return on average shareholders' equity for the year 2006 of 14.51% reflects a 53 basis point or 3.8% increase from the year 2005.

Our efficiency ratio for the year ended December 31, 2006 improved 16 basis points to 56.67% compared to 56.83% for the year ended December 31, 2005.

23

Trust Preferred Redemption

On January 24, 2007, we announced that our Board of Directors has authorized the redemption of all outstanding trust preferred securities at a redemption price equal to the principal amount of each security plus accrued and unpaid interest through the date of redemption. Approximately $59.5 million principal amount of trust preferred securities are currently outstanding, of which $34.5 million principal amount was issued in 1997 and $25 million principal amount was issued in 2002. The trust preferred securities are expected to be redeemed effective March 31, 2007, by the related trusts. We expect to incur a pre-tax charge from the unamortized debt issuance costs of approximately $1.9 million in the first quarter of 2007 as a result of the redemption of the debentures and trust preferred securities.

The redemption of the trust preferred securities is being made in connection with the concurrent redemption by the Corporation of all of our outstanding 9.0% Subordinated Debentures in the aggregate principal amount of approximately $36 million and 8.25% Subordinated Debentures in the aggregate principal amount of approximately $26 million. We expect to fund the redemption with the proceeds of a private placement of pooled trust preferred securities.

The new trust preferred securities are expected to have a fixed interest rate for five years and a floating rate of interest at a spread above the three-month LIBOR rate thereafter. The new trust preferred securities will have a 30-year term, but will be redeemable beginning five years from the date of issuance.

We estimate that the combined effect of the redemption of the debentures and trust preferred securities will reduce our interest expense by approximately $1.0 million in 2007 and $1.4 million annually through 2011. After giving effect to the redemption and issuance of new trust preferred securities, the Company’s capital ratios will remain unchanged.

As of December 31, 2006, we are not aware of any current recommendations by banking regulatory authorities which, if they were to be implemented, would have, or are reasonably likely to have, a material adverse impact on the Corporation’s liquidity, capital resources, or operations.

Critical Accounting Policies and Estimates

The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires the appropriate application of certain accounting policies, many of which require us to make estimates and assumptions about future events and their impact on amounts reported in our consolidated financial statements and related notes. Since future events and their impact cannot be determined with certainty, the actual results will inevitably differ from our estimates. Such differences could be material to the consolidated financial statements.

We believe the application of accounting policies and the estimates required therein are reasonable. These accounting policies and estimates are constantly reevaluated, and adjustments are made when facts and circumstances dictate a change. Historically, we have found our application of accounting policies to be appropriate, and actual results have not differed materially from those determined using necessary estimates.

Our accounting policies are more fully described in note 1 to the consolidated financial statements. We have identified the following critical accounting policies:

24

Loans -Loans with the ability and the intent to be held until maturity and/or payoff are reported at the carrying value of unpaid principal reduced by unearned interest and an allowance for loan and lease losses. Income is recorded on the level yield basis. Interest accrual 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 collection of interest is doubtful. Any loan greater than 90 days past due must be well secured and in the process of collection to continue accruing interest. Cash payments received on nonaccrual loans generally are applied against principal, and interest income is only recorded once principal recovery is reasonably assured. Loans are not reclassified as accruing until principal and interest payments are brought current and future payments appear reasonably certain.

Loan origination and commitment fees and certain direct loan origination costs are deferred and the net amount amortized over the estimated life of the related loans, leases, or commitments as a yield adjustment.

Allowance for Loan and Lease Losses -We maintain an allowance for loan and lease losses ("ALLL") at a level that is appropriate to cover estimated credit losses on individually evaluated loans determined to be impaired, as well as estimated credit losses inherent in the remainder of the loan and lease portfolio. Since arriving at an appropriate ALLL involves a high degree of management judgment, we use an ongoing quarterly analysis to develop a range of estimated losses. In accordance with accounting principles generally accepted in the United States, we use our best estimate within the range of potential credit loss to determine the appropriate ALLL. Credit losses are charged and recoveries are credited to the ALLL.

We utilize an internal risk grading system for commercial credits. Those larger commercial credits that exhibit probable or observed credit weaknesses are subject to individual review. The borrower’s cash flow, adequacy of collateral coverage, and other options available to the Corporation, including legal remedies, are evaluated. The review of individual loans includes those loans that are impaired as provided in Statement of Financial Accounting Standards ("SFAS") No. 114, Accounting by Creditors for Impairment of a Loan. We evaluate the collectibility of both principal and interest when assessing the need for loss provision. Historical loss rates are applied to other commercial loans not subject to specific allocations. The loss rates are determined from a migration analysis which computes the net charge off experience on loans according to their internal risk grade.

Homogenous loans, such as consumer installment, residential mortgages, and home equity lines are not individually risk graded. The associated ALLL for these loans is measured under SFAS No. 5, Accounting for Contingencies. The ALLL allocation for these pools of loans is established based on the average, maximum, minimum, and median loss ratios over the previous eight quarters.

Historical loss rates for commercial and retail loans are adjusted for significant factors that, in management’s judgment, reflect the impact of any current conditions on loss recognition. Factors that we consider include delinquency trends, current economic conditions and trends, strength of supervision and administration of the loan portfolio, levels of underperforming loans, level of recoveries to prior year's charge offs, trend in loan losses, industry concentrations and their relative strengths, amount of unsecured loans and underwriting exceptions. These factors are reviewed quarterly and a weighted range developed with a "most likely" scenario determined. The total of these weighted factors is then applied against the total portfolio and the ALLL is adjusted accordingly.

Loans Held for Sale - Mortgage loans originated and intended for sale in the secondary market are carried at the lower of cost or estimated market value in the aggregate. Net unrealized losses, if any, are recognized in a valuation allowance by charges to income.

Premises and Equipment - Premises and equipment are stated at cost less accumulated depreciation and amortization. Capital leases are included in premises and equipment at the capitalized amount less accumulated amortization. Premises and equipment are evaluated for impairment on a quarterly basis.

25

Depreciation and amortization are computed primarily using the straight-line method. Estimated useful lives range up to 40 years for buildings, 2 to 10 years for furniture, fixtures, and equipment, and up to the lease term for leasehold improvements. Capitalized leased assets are amortized on a straight-line basis over the lives of the respective leases.

Goodwill and Core Deposit Intangible -We evaluate total goodwill and core deposit intangible for impairment, based upon SFAS No. 142, Goodwill and Other Intangible Assets and SFAS No. 147, Acquisitions of Certain Financial Institutions, using fair value techniques including multiples of price/equity. Goodwill and core deposit intangible are evaluated for impairment on an annual basis or as other events may warrant.

Amortization of core deposit intangible is estimated at approximately $0.6 million annually for the next four years and approximately $0.3 million in year five.

Income Taxes - Income tax expense is based on the taxes due on the consolidated tax return plus deferred taxes based on the expected future tax consequences of temporary differences between carrying amounts and tax bases of assets and liabilities, using enacted tax rates.

Earnings Per Share ("EPS") - Basic EPS is calculated by dividing net income available to common shareholders by the weighted average number of common shares outstanding.

Diluted EPS adjusts the number of weighted average shares of common stock outstanding by the dilutive effect of stock options as prescribed in SFAS No. 123R which is discussed in the New Accounting Standards section below.

Segments - Management analyzes the operation of the Corporation assuming one operating segment, community banking services. The Corporation, through its operating subsidiaries, offers a wide range of consumer and commercial community banking services. These services include: (i) residential and commercial real estate loans; (ii) checking accounts; (iii) regular and term savings accounts and savings certificates; (iv) full service securities brokerage services; (v) consumer loans; (vi) debit cards; (vii) annuity and life insurance products; (viii) Individual Retirement Accounts and Keogh plans; (ix) commercialloans; (x) trust services; and (xi) commercial demand deposit accounts.

Bank Owned Life Insurance - The Corporation's bank owned life insurance policies are carried at their cash surrender value. We recognize tax-free income from the periodic increases in cash surrender value of these policies and from death benefits.

New Accounting Standards -

ØStock-Based Employee Compensation - In December 2004, SFAS No. 123R, Share-Based Payment, was issued. SFAS No. 123R is a revision of SFAS No. 123, Accounting for Stock-Based Compensation, and supersedes Accounting Principles Board (“APB”) Opinion No. 25, Accounting for Stock Issued to Employees. SFAS No. 123R requires the cost resulting from all share-based payment transactions be recognized in the financial statements, and establishes fair value as the measurement objective in accounting for share-based payment arrangements. In March 2005, the Securities and Exchange Commission issued Staff Accounting Bulletin Number 107 that provided additional guidance to public companies relating to share-based payment transactions and the implementation of SFAS 123R. Effective January 1, 2006, we adopted SFAS No. 123R using the modified retrospective application basis in accounting for stock-based compensation plans. Under SFAS No. 123R, we recognize compensation expense for the grant-date fair value of stock-based compensation issued over its requisite service period. Awards with a graded vesting are expensed on a straight-line basis. The grant-date fair value of stock options is measured using the Black-Scholes option-pricing model. Had compensation cost for the Corporation’s stock options granted in 2005 and 2004 been determined under the fair value approach described in SFAS No. 123R, the Corporation’s net income and earnings per share would have been reduced to the pro forma amounts indicated below:

26

(in thousands, except per share amounts) Years ended December 31		2005			2004
Net income as reported		$	34,412		$	30,950
Stock-based compensation expense			(994	)		(558	)
Tax effect			141			142
Net income pro forma		$	33,559		$	30,534
Basic net income per share	As reported	$	2.31		$	2.09
	Pro forma		2.25			2.06
Diluted net income per share	As reported	$	2.27		$	2.05
	Pro forma		2.22			2.02

For further information, see note 14 to the consolidated financial statements below.

ØAccounting for Uncertainty in Income Taxes - In July 2006, the Financial Accounting Standards Board ("FASB") issued Interpretation No. 48 ("FIN 48"), Accounting for Uncertainty in Income Taxes - An Interpretation of FASB Statement No. 109. FIN 48 clarifies the accounting for uncertainty in income taxes recognized in accordance with FASB Statement No. 109, Accounting for Income Taxes. This statement also prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. FIN 48 also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. The evaluation of a tax position in accordance with this statement is a two-step process. The first step is a recognition process to determine whether it is more likely than not that a tax position will be sustained upon examination, including resolution of any related appeals or litigation processes, based on the technical merits of the position. The second step is a measurement process whereby a tax position that meets the more likely than not recognition threshold is calculated to determine the amount of benefit to recognize in the financial statements. FIN 48 is effective for fiscal years beginning after December 15, 2006 and the cumulative effect of applying the provisions of this statement will be recognized as an adjustment to the beginning balance of retained earnings. The Corporation is currently in the process of evaluating the impact of adopting FIN 48 on its consolidated financial statements.

ØFinancial Statements—Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements - In September 2006, the SEC issued Staff Accounting Bulletin ("SAB") 108, Financial Statements—Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements. This SAB provides guidance on the consideration of prior year misstatements in determining whether the current year's financial statements are materially misstated. In providing this guidance, the SEC staff references both the "iron curtain" and "rollover" approaches to quantifying a current year misstatement for purposes of determining materiality. The iron curtain approach focuses on how the current year's balance sheet would be affected in correcting misstatements without considering the year in which the misstatement originated. The rollover approach focuses on the amount of the misstatements that originated in the current year's income statement. The SEC staff indicates that registrants should quantify the impact of correcting all misstatements, including both the carryover and reversing effects of prior year misstatements, on the current year financial statements. SAB 108 is effective for fiscal years ending after November 15, 2006. Registrants may either restate their financials for any material misstatements arising from the application of this SAB or recognize a cumulative effect of applying SAB 108 within the current year opening balance in retained earnings. The adoption of SAB 108 did not have a material impact on our consolidated financial statements.

27

Results of Operations

2006 Compared to 2005

As mentioned earlier, net income increased 13.5% over prior year while our basic earnings per share increased 12.1%. The increase in net income was primarily driven by a $4.6 million increase in our net interest revenue and a $4.0 million decrease in provision for loan losses. See below for further information. Our average shares outstanding increased from 14.9 million in 2005 to 15.1 million in 2006.

Net Interest Income:

Our year over year net interest margin remained flat at 4.02%. As rates stabilized in the latter part of the year, the margin compressed as expected. Our net interest margin for the fourth quarter 2006 was 3.94% compared to 4.12% for the fourth quarter 2005 and 4.08% for the third quarter 2006.

Year-to-date net interest income increased 4.4% from the year ended December 31, 2005. Interest income increased $29.0 million or 18.1% while interest expense increased $24.4 million or 42.8%. Average earning assets for the year ended December 31, 2006 increased $116.0 million or 4.5% over 2005. Average interest bearing liabilities increased $86.5 million or 4.1% over prior year. The taxable equivalent yield on average earning assets for the year 2006 increased 80 basis points from prior year to 7.02% while the cost of interest of interest bearing liabilities increased 100 basis points to 3.68%. The cost of interest bearing liabilities has been impacted by the change in deposit mix as well as by a change in market rates. Average interest bearing deposits including repurchase agreements increased 6.4% during 2006 while average noninterest bearing deposits decreased 5.2%. Average loans accounted for 78.5% of average earning assets in 2006 and 77.9% in 2005.

Provision for Loan Losses and Allowance for Loan and Lease Losses:

The provision for loan losses that was added to the allowance was $4.3 million for the year ended December 31, 2006 compared to $8.3 million for 2005. This provision represents a charge against current earnings in order to maintain the allowance at an appropriate level determined using the accounting estimates described in the Critical Accounting Policies and Estimates section. Loan losses, net of recoveries, for the year decreased 16.8% from $7.6 million, or 0.4% of average loans, to $6.3 million, or 0.3% of average loans. Reflective of the improvement in asset quality, our reserve for losses on loans as a percentage of total loans outstanding at December 31, 2006 decreased to 1.27% from the 1.40% at December 31, 2005.

Nonperforming loans at December 31, 2006 were $14.2 million, a 33.5% decrease from $21.4 million at December 31, 2005. Nonperforming loans as a percentage of total loans at December 31, 2006 were 0.66%, a 36 basis point decrease from December 31, 2005.

Foreclosed properties at December 31, 2006 were $4.5 million compared to $5.4 million on December 31, 2005.

Noninterest Income:

Year-to-date noninterest income decreased 2.7% to $32.7 million for the year ended December 31, 2006 from the $33.6 million for the same period last year. The following table displays the annual activity in the various significant noninterest income accounts.

28

Noninterest Income Summary
(in thousands)		Year Ended 2006		Year Ended 2005
Deposit related fees		$	20,162	$	18,050
Loan related fees			2,473		5,638
Trust revenue			3,743		3,067
Gains on sales of loans			1,265		1,481
Other revenue			5,076		5,391
	Total noninterest income	$	32,719	$	33,627

The increases in recurring revenue sources year over year 2005 to 2006 in deposit related fees and trust revenue were offset by declines in gains on sales of loans due to the interest rate environment and loan related fees.

Noninterest Expense:

Year-to-date noninterest expense increased 2.3% from $78.6 million to $80.4 million. The most significant components of this increase were a 3.8% increase in personnel expenses due to normal annual salary adjustments and health care costs and a 6.8% increase in occupancy and equipment due to expenditures for new branch locations and technology and communication upgrades to our core operating systems.

Our efficiency ratio for the year 2006 improved 16 basis points from 2005 to 56.67%. The deposit (including repurchase agreements) to FTE (full-time equivalent) ratio increased to $2.5 million at December 31, 2006 from $2.4 million at December 31, 2005.

2005 Compared to 2004

Net income for 2005 was $34.4 million compared to $31.0 million in 2004. The increase in net income was primarily driven by a 10.7% increase in net interest income. See the Net Interest Income section below for further information. Basic earnings per share for 2005 were $2.31 compared to $2.09 per basic share for 2004. The average shares outstanding in 2005 and 2004 were 14.9 million and 14.8 million, respectively.

Net interest income for 2005 was $103.0 million compared to $93.1 million in 2004. Noninterest income was $33.6 million compared to $34.1 million in 2004 and noninterest expense was $78.6 million compared to $74.6 million in 2004. See the Noninterest Income and Noninterest Expense sections below for further information.

Return on average assets was 1.22% for 2005 and 2004, and return on average equity increased 50 basis points from 13.48% for 2004 to 13.98% for 2005.

Net Interest Income:

Our net interest margin for the year 2005 decreased 4 basis points from 4.06% to 4.02%. However, the net interest margin for the quarter ended December 31, 2005 of 4.12% was a 15 basis point increase from the quarter ended December 31, 2004 and an increase of 4 basis points from prior quarter. The increase in the net interest margin for the quarter was primarily the result of the increased yield on average earning assets attributable to the reallocation of earning assets from the investment portfolio to the higher yielding loan portfolio. The yield on average earning assets for the fourth quarter 2005 increased 87 basis points from the fourth quarter 2004 and 30 basis points from the third quarter 2005. For further information, see the table titled "Consolidated Average Balance Sheets and Taxable Equivalent Income/Expense and Yields/Rates" in the Selected Statistical Information.

29

Average earning assets were $2.6 billion for the year 2005 compared to $2.3 billion for 2004. Average interest bearing liabilities were $2.1 billion for the year 2005 compared to $1.9 billion for 2004. Average interest bearing liabilities as a percentage of average earning assets were 81.9% for the year ended December 31, 2005 compared to 82.0% for the year ended December 31, 2004.

The taxable equivalent yield on average earning assets was 6.22% for 2005 compared to 5.65% in 2004. The cost of average interest bearing liabilities was 2.68% for 2005 compared to 1.94% for 2004. Although the increase in cost of average interest bearing liabilities surpassed the increase in yield on average earning assets by 17 basis points, the net interest margin only decreased 2 basis points because average interest bearing deposits including repurchase agreements increased 7.0% during 2005 while average noninterest bearing deposits increased 11.5%. The yield on interest bearing assets has been impacted by the change in the earning asset mix between the loan portfolio and the investment portfolio as well as by the change in market rates. Average loans accounted for 77.9% of average earning assets in 2005 and 77.7% of average earning assets in 2004.

Provision for Loan Losses and Allowance for Loan and Lease Losses:

The provision for loan losses that was added to the allowance was $8.3 million for the year ended December 31, 2005 compared to $8.6 million for 2004. This provision represents a charge against current earnings in order to maintain the allowance at an appropriate level determined using the accounting estimates described in the Critical Accounting Policies and Estimates section. Loan losses, net of recoveries, as a percentage of average loans outstanding were 0.37% in 2005 compared to 0.35% in 2004 as net loan losses were $7.6 million for 2005 compared to $6.3 million for 2004.

Our reserve for losses on loans as a percentage of total loans outstanding decreased from 1.42% as of December 31, 2004 to 1.40% as of December 31, 2005.

Nonperforming loans at December 31, 2005 were $21.4 million, or 1.0% of total loans, compared to $20.1 million, or 1.1% of total loans at December 31, 2004. Foreclosed properties at December 31, 2005 were $5.4 million compared to $4.8 million on December 31, 2004.

Noninterest Income:

Noninterest income for the year ended December 31, 2005 decreased 1.3% from prior year. The following table displays the annual activity in the various significant noninterest income accounts.

Noninterest Income Summary
(in thousands)		Year Ended 2005		Year Ended 2004
Deposit related fees		$	18,050	$	17,658
Loan related fees			5,638		5,249
Trust revenue			3,067		2,456
Gains on sales of loans			1,481		1,619
Securities gains			3		639
Other revenue			5,388		6,456
	Total noninterest income	$	33,627	$	34,077

The increase in recurring revenue sources from the year ended 2004 to the year ended 2005 including deposit related fees, loan related fees, and trust revenue was offset by the decline in nonrecurring other revenue items and a decline in gains on sales of loans due to the rising interest rate environment.

30

Noninterest Expense:

Noninterest expense for the year ended December 31, 2005 increased 5.3% to $78.6 million from the $74.6 million for the year ended December 31, 2004. The increase in noninterest expense from prior year was primarily attributable to an increase of $3.0 million in personnel expense due to normal salary increases, the filling of budgeted key positions, the Danville bank acquisition, and new branch openings. Occupancy and equipment expense increased $1.3 million from 2004 to 2005 also as a result of the Danville bank acquisition and new branch openings during the year.

The efficiency ratio for the year ended December 31, 2005 improved to 56.83% from the 58.25% for the year ended December 31, 2004. The deposit (including repurchase agreements) to FTE (full-time equivalent) ratio increased to $2.4 million at December 31, 2005 from $2.3 million at December 31, 2004.

Liquidity and Market Risk

The objective of the Corporation’s Asset/Liability management function is to maintain consistent growth in net interest income within our policy limits. This objective is accomplished through management of our consolidated balance sheet composition, liquidity, and interest rate risk exposures arising from changing economic conditions, interest rates, and customer preferences. The goal of liquidity management is to provide adequate funds to meet changes in loan and lease demand or unexpected deposit withdrawals. This is accomplished by maintaining liquid assets in the form of cash and cash equivalents and investment securities, maintaining sufficient unused borrowing capacity, and growth in core deposits. As of December 31, 2006, we had approximately $157.5 million in cash and cash equivalents and approximately $425.9 million in securities valued at estimated fair value designated as available-for-sale and available to meet liquidity needs on a continuing basis. Additional asset-driven liquidity is provided by the remainder of the securities portfolio and the repayment of loans. In addition to core deposit funding, we also have a variety of other short-term and long-term funding sources available. We also rely on Federal Home Loan Bank advances for both liquidity and management of our asset/liability position. Federal Home Loan Bank advances were $81.2 million at December 31, 2006 compared to $122.8 million at December 31, 2005. As of December 31, 2006, we had a $331.1 million available borrowing position with the Federal Home Loan Bank. We generally rely upon net inflows of cash from financing activities, supplemented by net inflows of cash from operating activities, to provide cash for our investing activities. As is typical of many financial institutions, significant financing activities include deposit gathering, use of short-term borrowing facilities such as repurchase agreements and federal funds purchased, and issuance of long-term debt. At December 31, 2006, we had a $12 million revolving line of credit, all of which is currently available to meet any future cash needs. Our primary investing activities include purchases of securities and loan originations. We do not rely on any one source of liquidity and manage availability in response to changing consolidated balance sheet needs.

Stock Repurchase Program

The Corporation’s stock repurchase program began in December 1998 with the authorization to acquire up to 500,000 shares and was increased by an additional 1,000,000 shares in July 2000. The Corporation issued a press release on May 13, 2003 announcing its intention to repurchase up to 1,000,000 additional shares. During the years 2005 and 2006, we did not acquire shares of the Corporation’s stock. As of December 31, 2006, a total of 1,921,481 shares have been repurchased through this program. The following table shows Board authorizations and repurchases made through the stock repurchase program for the years 1998 through 2006:

31

	Board Authorizations	Repurchases*		Shares Available for Repurchase
		Average Price ($)	# of Shares
1998	500,000	-	0
1999	0	15.89	131,517
2000	1,000,000	11.27	694,064
2001	0	14.69	444,945
2002	0	19.48	360,287
2003	1,000,000	21.58	235,668
2004	0	25.45	55,000
2005	0	-	0
2006	0	-	0
Total	2,500,000	15.59	1,921,481	578,519

*Repurchased shares and average prices have been restated to reflect stock dividends that have occurred; however, board authorized shares have not been adjusted.

Interest Rate Risk

We consider interest rate risk one of our most significant market risks. Interest rate risk is the exposure to adverse changes in net interest income due to changes in interest rates. Consistency of our net interest revenue is largely dependent upon the effective management of interest rate risk. We employ a variety of measurement techniques to identify and manage our interest rate risk including the use of an earnings simulation model to analyze net interest income sensitivity to changing interest rates. The model is based on actual cash flows and repricing characteristics for on and off-balance sheet instruments and incorporates market-based assumptions regarding the effect of changing interest rates on the prepayment rates of certain assets and liabilities. Assumptions based on the historical behavior of deposit rates and balances in relation to changes in interest rates are also incorporated into the model. These assumptions are inherently uncertain, and as a result, the model cannot precisely measure net interest income or precisely predict the impact of fluctuations in interest rates on net interest income. Actual results will differ from simulated results due to timing, magnitude, and frequency of interest rate changes as well as changes in market conditions and management strategies.

The Corporation’s Asset/Liability Management Committee (ALCO), which includes executive and senior management representatives and reports to the Board of Directors, monitors and manages interest rate risk within Board-approved policy limits. Our current exposure to interest rate risks is determined by measuring the anticipated change in net interest income over a twelve-month period assuming a 200 basis point increase or decrease in rates, spread evenly over the twelve-month period.

The following table shows our estimated earnings sensitivity profile as of December 31, 2006:

Change in Interest Rates (basis points)	Percentage Change in Net Interest Income (12 Months)
+200	5.42%
-200	(5.52)%

The following table shows the Corporation’s estimated earnings sensitivity profile as of December 31, 2005:

Change in Interest Rates (basis points)	Percentage Change in Net Interest Income (12 Months)
+200	5.11%
-200	(5.32)%

32

The simulation model used a 200 basis point increase in the yield curve spread evenly over a twelve-month period. The measurement at December 31, 2006 estimates that our net interest income would increase by 5.42% over one year. A 200 basis point immediate and sustained decrease in interest rates would decrease net interest income by 5.52% over one year. In order to reduce the exposure to interest rate fluctuations and to manage liquidity, we have developed sale procedures for several types of interest-sensitive assets. Virtually all long-term, fixed rate single family residential mortgage loans underwritten according to Federal Home Loan Mortgage Corporation guidelines are sold for cash upon origination. Periodically, additional assets such as commercial loans are also sold. In 2006 and 2005, $64.9 million and $66.9 million, respectively, was realized on the sale of fixed rate residential mortgages. We focus our efforts on consistent net interest revenue and net interest margin growth through each of the retail and wholesale business lines. We do not currently engage in trading activities.

Our Static Repricing GAP as of December 31, 2006 is presented below. In the 12 month repricing GAP, rate sensitive liabilities ("RSL") exceeded rate sensitive assets ("RSA") by $177.8 million.

	1-3 Months			4-6 Months			7-9 Months			10-12 Months			2-3 Years			4-5 Years			> 5 Years
Assets	$	1,276,724		$	167,695		$	125,189		$	114,645		$	557,818		$	327,961		$	399,729
Liabilities and equity		621,988			335,965			362,833			541,277			689,525			47,610			370,563
Repricing difference		654,736			(168,270	)		(237,643	)		(426,632	)		(131,707	)		280,351			29,166
Cumulative GAP		654,736			486,466			248,823			(177,810	)		(309,517	)		(29,166	)		0
RSA/RSL		2.05x			0.50x			0.35x			0.21x			0.81x			6.89x			1.08x
Cumulative GAP to total assets		22.05	%		16.38	%		8.38	%		(5.99	)%		(10.42	)%		(0.98	)%		0.00	%

Capital Resources

We continue to grow our shareholders’ equity while also providing an average annual dividend yield during 2006 of 2.53% to shareholders. Shareholders’ equity of $282.4 million on December 31, 2006 was an 11.2% increase from the $253.9 million on December 31, 2005. Our primary source of capital growth is retained earnings. Cash dividends were $1.05 per share for 2006 and $0.98 per share for 2005. We retained 59.5% of our earnings in 2006 compared to 57.6% in 2005.

Regulatory guidelines require bank holding companies, commercial banks, and savings banks to maintain certain minimum capital ratios and define companies as "well-capitalized" that sufficiently exceed the minimum ratios. The banking regulators may alter minimum capital requirements as a result of revising their internal policies and their ratings of individual institutions. To be "well-capitalized" banks and bank holding companies must maintain a Tier 1 leverage ratio of no less than 5.0%, a Tier 1 risk based ratio of no less than 6.0%, and a total risk based ratio of no less than 10.0%. Our ratios as of December 31, 2006 were 9.58%, 12.21%, and 13.43%, respectively. Community Trust Bancorp, Inc. and it subsidiaries met the criteria for "well-capitalized" at December 31, 2006. See note 20 to the consolidated financial statements for further information.

As of December 31, 2006, we are not aware of any current recommendations by banking regulatory authorities which, if they were to be implemented, would have, or are reasonably likely to have, a material adverse impact on our liquidity, capital resources, or operations.

33

Impact of Inflation, Changing Prices, and Local Economic Conditions

The majority of our assets and liabilities are monetary in nature. Therefore, our Corporation differs greatly from most commercial and industrial companies that have significant investments in non-monetary assets, such as fixed assets and inventories. However, inflation does have an important impact on the growth of assets in the banking industry and on the resulting need to increase equity capital at higher than normal rates in order to maintain an appropriate equity to assets ratio. Inflation also affects other expenses, which tend to rise during periods of general inflation.

We believe the most significant impact on financial and operating results is our ability to react to changes in interest rates. We seek to maintain an essentially balanced position between interest sensitive assets and liabilities in order to protect against the effects of wide interest rate fluctuations.

Our success is dependent on the general economic conditions of the communities we serve. Unlike larger banks that are more geographically diversified, we provide financial and banking services primarily to eastern, northeastern, central, and south central Kentucky and southern West Virginia. The economic conditions in these areas have a significant impact on loan demand, the ability of borrowers to repay loans, and the value of the collateral securing loans. A significant decline in general economic conditions will affect these local economic conditions and will negatively affect the financial results of our banking operations. Factors influencing general conditions include inflation, recession, unemployment, and other factors beyond our control.

Contractual Obligations and Commitments

As disclosed in the notes to the consolidated financial statements, we have certain obligations and commitments to make future payments under contracts. At December 31, 2006, the aggregate contractual obligations and commitments are:

Contractual Obligations:	Payments Due by Period
(in thousands)	Total		1 Year		2-5 Years		After 5 Years
Deposits without stated maturity	$	1,117,364	$	1,117,364	$	0	$	0
Certificates of deposit		1,223,803		1,106,349		116,717		737
Repurchase agreements and other short-term borrowings		177,570		156,693		20,877		0
Advances from Federal Home Loan Bank		81,245		40,339		40,859		47
Interest on advances from Federal Home Loan Bank*		3,694		2,645		1,044		5
Long-term debt		61,341		0		0		61,341
Interest on long-term debt*		118,511		5,327		21,310		91,874
Annual rental commitments under leases		9,879		1,475		3,420		4,984
Total	$	2,793,407	$	2,430,192	$	204,227	$	158,988

*The amounts provided as interest on advances from Federal Home Loan Bank and interest on long-term debt assume the liabilities will not be prepaid and interest is calculated to their individual maturities.

Other Commitments:	Amount of Commitment - Expiration by Period
(in thousands)	Total		1 Year		2-5 Years		After 5 Years
Standby letters of credit	$	54,823	$	47,773	$	7,050	$	0
Commitments to extend credit		424,034		331,164		85,057		7,813
Total	$	478,857	$	378,937	$	92,107	$	7,813

Commitments to extend credit and standby letters of credit do not necessarily represent future cash requirements in that these commitments often expire without being drawn upon.

34

Item 7A. Quantitative and Qualitative Disclosures about Market Risk

The Corporation currently does not engage in any hedging activity. The only derivative activity in which the Corporation engages is an interest-only strip in the amount of $105 thousand and loans held for sale in the amount of $1.4 million as of December 31, 2006. Analysis of the Corporation’s interest rate sensitivity can be found in the Liquidity and Market Risk section of Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

35

Item 8. Financial Statements and Supplementary Data

Consolidated Balance Sheets

(dollars in thousands) December 31	2006			2005
Assets:
Cash and due from banks	$	95,438		$	91,066
Federal funds sold		62,100			31,145
Cash and cash equivalents		157,538			122,211
Securities available-for-sale at fair value
(amortized cost of $430,867 and $402,241, respectively)		425,851			395,571
Securities held-to-maturity at amortized cost
(fair value of $39,015 and $46,528, respectively)		40,508			48,444
Loans held for sale		1,431			135
Loans		2,167,458			2,107,344
Allowance for loan and lease losses		(27,526	)		(29,506	)
Net loans		2,139,932			2,077,838
Premises and equipment, net		55,665			57,966
Federal Reserve Bank and Federal Home Loan Bank stock		28,027			26,682
Goodwill		65,059			65,059
Core deposit intangible (net of accumulated amortization of $4,953 and
$4,319, respectively)		2,551			3,186
Bank owned life insurance		20,937			20,069
Other assets		32,262			33,892
Total assets	$	2,969,761		$	2,851,053
Liabilities and shareholders’ equity:
Deposits
Noninterest bearing	$	429,994		$	445,929
Interest bearing		1,911,173			1,800,622
Total deposits		2,341,167			2,246,551
Repurchase agreements		161,630			129,156
Federal funds purchased and other short-term borrowings		15,940			17,485
Advances from Federal Home Loan Bank		81,245			122,834
Long-term debt		61,341			61,341
Deferred tax liability		4,999			227
Other liabilities		21,064			19,514
Total liabilities		2,687,386			2,597,108
Shareholders’ equity:
Preferred stock, 300,000 shares authorized and unissued
Common stock, $5 par value, shares authorized 25,000,000;
shares outstanding 2006 - 15,158,176; 2005 - 14,997,369		75,791			74,987
Capital surplus		150,965			147,626
Retained earnings		58,879			35,667
Accumulated other comprehensive loss, net of tax		(3,260	)		(4,335	)
Total shareholders’ equity		282,375			253,945
Total liabilities and shareholders’ equity	$	2,969,761		$	2,851,053

See notes to consolidated financial statements.

36

Consolidated Statements of Income

(in thousands except per share data) Year Ended December 31	2006		2005		2004
Interest income:
Interest and fees on loans, including loans held for sale	$	163,194	$	137,291	$	111,181
Interest and dividends on securities
Taxable		18,916		17,555		15,316
Tax exempt		2,064		2,104		2,204
Interest and dividends on Federal Reserve Bank and Federal Home Loan Bank stock		1,588		1,337		1,093
Other, including interest on federal funds sold		3,383		1,875		607
Total interest income		189,145		160,162		130,401
Interest expense:
Interest on deposits		63,856		43,012		28,460
Interest on repurchase agreements and other short-term borrowings		8,620		3,819		1,568
Interest on advances from Federal Home Loan Bank		3,648		4,872		1,907
Interest on long-term debt		5,414		5,414		5,414
Total interest expense		81,538		57,117		37,349
Net interest income		107,607		103,045		93,052
Provision for loan losses		4,305		8,285		8,648
Net interest income after provision for loan losses		103,302		94,760		84,404
Noninterest income:
Service charges on deposit accounts		20,162		18,050		17,658
Gains on sales of loans, net		1,265		1,481		1,619
Trust income		3,743		3,067		2,456
Securities gains		0		3		639
Other		7,549		11,026		11,705
Total noninterest income		32,719		33,627		34,077
Noninterest expense:
Salaries and employee benefits		44,145		42,535		39,501
Occupancy, net		6,420		6,387		5,629
Equipment		5,047		4,352		3,855
Data processing		3,733		4,479		4,166
Bank franchise tax		3,261		3,025		3,102
Legal and professional fees		2,816		2,855		3,187
Other		14,985		14,936		15,155
Total noninterest expense		80,407		78,569		74,595
Income before income taxes		55,614		49,818		43,886
Income taxes		16,550		15,406		12,936
Net income	$	39,064	$	34,412	$	30,950
Basic earnings per share	$	2.59	$	2.31	$	2.09
Diluted earnings per share		2.55		2.27		2.05

See notes to consolidated financial statements.

37

Consolidated Statements of Changes in Shareholders’ Equity

(in thousands except per share and share amounts)	Common Shares			Common Stock			Capital Surplus			Retained Earnings			Accumulated Other Comprehensive Income (Loss), Net of Tax			Total
Balance, January 1, 2004		13,461,600		$	67,308		$	105,579		$	43,663		$	4,843		$	221,393
Net income											30,950						30,950
Net change in unrealized gain/loss on securities available-for-sale, net of tax of $2,044														(3,797	)		(3,797	)
Comprehensive income																	27,153
Cash dividends declared ($0.87 per share)											(12,854	)					(12,854	)
To record 10% common stock dividend		1,349,146			6,746			39,139			(45,885	)					0
Issuance of common stock		84,471			422			1,409									1,831
Purchase of common stock		(50,000	)		(250	)		(1,150	)								(1,400	)
Other								46									46
Balance, December 31, 2004		14,845,217			74,226			145,023			15,874			1,046			236,169
Net income											34,412						34,412
Net change in unrealized gain/loss on securities available-for-sale, net of tax of $2,898														(5,381	)		(5,381	)
Comprehensive income																	29,031
Cash dividends declared ($0.98 per share)											(14,619	)					(14,619	)
Issuance of common stock		152,152			761			2,603									3,364
Balance, December 31, 2005		14,997,369			74,987			147,626			35,667			(4,335	)		253,945
Net income											39,064						39,064
Net change in unrealized gain/loss on securities available-for-sale, net of tax of ($579)														1,075			1,075
Comprehensive income																	40,139
Cash dividends declared ($1.05 per share)											(15,852	)					(15,852	)
Issuance of common stock		160,807			804			2,378									3,182
Excess tax benefits from stock-based compensation								961									961
Balance, December 31, 2006		15,158,176		$	75,791		$	150,965		$	58,879		$	(3,260	)	$	282,375

See notes to consolidated financial statements.

38

Consolidated Statements of Cash Flows

(in thousands) Year Ended December 31	2006			2005			2004
Cash flows from operating activities:
Net income	$	39,064		$	34,412		$	30,950
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		5,819			5,141			4,469
Change in net deferred tax liability		4,193			745			1,886
Stock based compensation		(711	)		0			0
Provision for loan and other real estate losses		4,616			8,410			8,934
Securities gains		0			(3	)		(796	)
Securities losses		0			0			157
Gains on sale of mortgage loans held for sale		(1,265	)		(1,493	)		(1,619	)
Gains (losses) on sale of other loans		0			13			0
Gains (losses) on sale of assets, net		(5	)		(28	)		(238	)
Proceeds from sale of mortgage loans held for sale		64,943			66,883			68,573
Funding of loans held for sale		(64,974	)		(65,525	)		(66,639	)
Amortization of securities premiums, net		957			1,682			1,252
BOLI income		868			635			583
Other		678			724			681
Changes in:
Other liabilities		4,401			1,131			683
Other assets		(3,101	)		(11,396	)		3,674
Net cash provided by operating activities		55,483			41,331			52,550
Cash flows from investing activities:
Securities available-for-sale:
Proceeds from sales		128,900			53,850			141,801
Proceeds from prepayments and maturities		58,754			106,721			95,166
Purchase of securities		(218,446	)		(108,082	)		(303,485	)
Securities held-to-maturity:
Proceeds from prepayments and maturities		7,800			13,966			26,027
Purchase of securities		0			0			(1,562	)
Proceeds from sale of loans		0			105			0
Change in loans, net		(68,573	)		(141,253	)		(173,803	)
Purchase of premises, equipment, and other real estate		(3,197	)		(5,321	)		(7,039	)
Proceeds from sale of premises and equipment		378			32			35
Proceeds from sale of other real estate and repossessed assets		2,821			2,698			3,483
Additions in other real estate owned		(73	)		(327	)		0
Investment in bank owned life insurance		0			3,885			0
Net cash paid in acquisition		0			(4,313	)		0
Net cash used in investing activities		(91,636	)		(78,039	)		(219,377	)
Cash flows from financing activities:
Change in deposits, net		94,616			36,317			72,803
Change in repurchase agreements and other short-term borrowings, net		30,929			53,997			(12,649	)
Advances from Federal Home Loan Bank		0			0			200,000
Payments on advances from Federal Home Loan Bank		(41,589	)		(50,056	)		(40,801	)
Issuance of common stock		3,182			3,364			1,831
Purchase of common stock		0			0			(1,400	)
Other equity adjustments		0			0			46
Dividends paid		(15,658	)		(14,283	)		(12,384	)
Net cash provided by financing activities		71,480			29,339			207,446
Net increase (decrease) in cash and cash equivalents		35,327			(7,369	)		40,619
Cash and cash equivalents at beginning of year		122,211			129,580			88,961
Cash and cash equivalents at end of year	$	157,538		$	122,211		$	129,580

See notes to consolidated financial statements.

39

Notes to Consolidated Financial Statements

1. Accounting Policies

Basis of Presentation - The consolidated financial statements include Community Trust Bancorp, Inc. (the "Corporation") and its subsidiaries, including its principal subsidiary, Community Trust Bank, Inc. (the "Bank"). Intercompany transactions and accounts have been eliminated in consolidation.

Nature of Operations - Substantially all assets, liabilities, revenues, and expenses are related to banking operations, including lending, investing of funds, obtaining of deposits, trust operations, full service brokerage operations, and other financing activities. All of our business offices and the majority of our business are located in eastern, northeastern, central, and south central Kentucky and southern West Virginia.

Use of Estimates - In preparing the consolidated financial statements, management must make certain estimates and assumptions. These estimates and assumptions affect the amounts reported for assets, liabilities, revenues, and expenses, as well as affecting the disclosures provided. Future results could differ from the current estimates. Such estimates include, but are not limited to, the allowance for loan and lease losses, fair value of securities and mortgage servicing rights, and goodwill (the excess of cost over net assets acquired).

Cash and Cash Equivalents - Cash and cash equivalents include cash on hand, amounts due from banks, interest bearing deposits in other financial institutions, and federal funds sold. Generally, federal funds are sold for one-day periods.

Investments -Management determines the classification of securities at purchase. We classify securities into held-to-maturity, trading, or available-for-sale categories. Held-to-maturity securities are those which we have the positive intent and ability to hold to maturity and are reported at amortized cost. In accordance with Statement of Financial Accounting Standards ("SFAS") No. 115, Accounting for Certain Investments in Debt and Equity Securities, investments in debt securities that are not classified as held-to-maturity and equity securities that have readily determinable fair values shall be classified in one of the following categories and measured at fair value in the statement of financial position:

a. Trading securities. Securities that are bought and held principally for the purpose of selling them in the near term (thus held for only a short period of time) shall be classified as trading securities. Trading generally reflects active and frequent buying and selling, and trading securities are generally used with the objective of generating profits on short-term differences in price.

b. Available-for-sale securities. Investments not classified as trading securities (nor as held-to-maturity securities) shall be classified as available-for-sale securities. We do not have any securities that are classified as trading securities. Available-for-sale securities are reported at fair value, with unrealized gains and losses included as a separate component of shareholders’ equity, net of tax. If declines in fair value are not temporary, the carrying value of the securities is written down to fair value as a realized loss.

Gains or losses on disposition of securities are computed by specific identification for all securities except for shares in mutual funds, which are computed by average cost. Interest and dividend income, adjusted by amortization of purchase premium or discount, is included in earnings.

40

Loans -Loans with the ability and the intent to be held until maturity and/or payoff are reported at the carrying value of unpaid principal reduced by unearned interest and an allowance for loan and lease losses. Income is recorded on the level yield basis. Interest accrual 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 collection of interest is doubtful. Any loan greater than 90 days past due must be well secured and in the process of collection to continue accruing interest. Cash payments received on nonaccrual loans generally are applied against principal, and interest income is only recorded once principal recovery is reasonably assured. Loans are not reclassified as accruing until principal and interest payments are brought current and future payments appear reasonably certain.

Loan origination and commitment fees and certain direct loan origination costs are deferred and the net amount amortized over the estimated life of the related loans, leases, or commitments as a yield adjustment.

Allowance for Loan and Lease Losses -We maintain an allowance for loan and lease losses ("ALLL") at a level that is appropriate to cover estimated credit losses on individually evaluated loans determined to be impaired, as well as estimated credit losses inherent in the remainder of the loan and lease portfolio. Since arriving at an appropriate ALLL involves a high degree of management judgment, we use an ongoing quarterly analysis to develop a range of estimated losses. In accordance with accounting principles generally accepted in the United States, we use our best estimate within the range of potential credit loss to determine the appropriate ALLL. Credit losses are charged and recoveries are credited to the ALLL.

We utilize an internal risk grading system for commercial credits. Those larger commercial credits that exhibit probable or observed credit weaknesses are subject to individual review. The borrower’s cash flow, adequacy of collateral coverage, and other options available to the Corporation, including legal remedies, are evaluated. The review of individual loans includes those loans that are impaired as provided in SFAS No. 114, Accounting by Creditors for Impairment of a Loan. We evaluate the collectibility of both principal and interest when assessing the need for loss provision. Historical loss rates are applied to other commercial loans not subject to specific allocations. The loss rates are determined from a migration analysis which computes the net charge off experience on loans according to their internal risk grade.

Homogenous loans, such as consumer installment, residential mortgages, and home equity lines are not individually risk graded. The associated ALLL for these loans is measured under SFAS No. 5, Accounting for Contingencies. The ALLL allocation for these pools of loans is established based on the average, maximum, minimum, and median loss ratios over the previous eight quarters.

Historical loss rates for commercial and retail loans are adjusted for significant factors that, in management’s judgment, reflect the impact of any current conditions on loss recognition. Factors that we consider include delinquency trends, current economic conditions and trends, strength of supervision and administration of the loan portfolio, levels of underperforming loans, level of recoveries to prior year's charge offs, trend in loan losses, industry concentrations and their relative strengths, amount of unsecured loans and underwriting exceptions. These factors are reviewed quarterly and a weighted range developed with a "most likely" scenario determined. The total of these weighted factors is then applied against the total portfolio and the ALLL is adjusted accordingly.

Loans Held for Sale - Mortgage loans originated and intended for sale in the secondary market are carried at the lower of cost or estimated market value in the aggregate. Net unrealized losses, if any, are recognized in a valuation allowance by charges to income.

Premises and Equipment - Premises and equipment are stated at cost less accumulated depreciation and amortization. Capital leases are included in premises and equipment at the capitalized amount less accumulated amortization. Premises and equipment are evaluated for impairment on a quarterly basis.

41

Depreciation and amortization are computed primarily using the straight-line method. Estimated useful lives range up to 40 years for buildings, 2 to 10 years for furniture, fixtures, and equipment, and up to the lease term for leasehold improvements. Capitalized leased assets are amortized on a straight-line basis over the lives of the respective leases.

Other Real Estate - Real estate acquired by foreclosure is carried at the lower of the investment in the property or its fair value. Other real estate owned by the Corporation included in other assets at December 31, 2006 and 2005 was $4.5 million and $5.4 million, respectively.

Goodwill and Core Deposit Intangible -We evaluate total goodwill and core deposit intangible for impairment, based upon SFAS No. 142, Goodwill and Other Intangible Assets and SFAS No. 147, Acquisitions of Certain Financial Institutions, using fair value techniques including multiples of price/equity. Goodwill and core deposit intangible are evaluated for impairment on an annual basis or as other events may warrant.

Amortization of core deposit intangible is estimated at approximately $0.6 million annually for the next four years and approximately $0.3 million in year five.

Income Taxes - Income tax expense is based on the taxes due on the consolidated tax return plus deferred taxes based on the expected future tax consequences of temporary differences between carrying amounts and tax bases of assets and liabilities, using enacted tax rates.

Earnings Per Share ("EPS") - Basic EPS is calculated by dividing net income available to common shareholders by the weighted average number of common shares outstanding.

Diluted EPS adjusts the number of weighted average shares of common stock outstanding by the dilutive effect of stock options as prescribed in SFAS No. 123R which is discussed in the New Accounting Standards section below.

Segments - Management analyzes the operation of the Corporation assuming one operating segment, community banking services. The Corporation, through its operating subsidiaries, offers a wide range of consumer and commercial community banking services. These services include: (i) residential and commercial real estate loans; (ii) checking accounts; (iii) regular and term savings accounts and savings certificates; (iv) full service securities brokerage services; (v) consumer loans; (vi) debit cards; (vii) annuity and life insurance products; (viii) Individual Retirement Accounts and Keogh plans; (ix) commercialloans; (x) trust services; and (xi) commercial demand deposit accounts.

Bank Owned Life Insurance - The Corporation's bank owned life insurance policies are carried at their cash surrender value. We recognize tax-free income from the periodic increases in cash surrender value of these policies and from death benefits.

News Accounting Standards -

ØStock-Based Employee Compensation - In December 2004, SFAS No. 123R, Share-Based Payment, was issued. SFAS No. 123R is a revision of SFAS No. 123, Accounting for Stock-Based Compensation, and supersedes Accounting Principles Board (“APB”) Opinion No. 25, Accounting for Stock Issued to Employees. SFAS No. 123R requires the cost resulting from all share-based payment transactions be recognized in the financial statements, and establishes fair value as the measurement objective in accounting for share-based payment arrangements. In March 2005, the Securities and Exchange Commission issued Staff Accounting Bulletin Number 107 that provided additional guidance to public companies relating to share-based payment transactions and the implementation of SFAS 123R. Effective January 1, 2006, we adopted SFAS No. 123R using the modified retrospective application basis in accounting for stock-based compensation plans. Under SFAS No. 123R, we recognize compensation expense for the grant-date fair value of stock-based compensation issued over its requisite service period. Awards with a graded vesting are expensed on a straight-line basis. The grant-date fair value of stock options is measured using the Black-Scholes option-pricing model. Had compensation cost for the Corporation’s stock options granted in 2005 and 2004 been determined under the fair value approach described in SFAS No. 123R, the Corporation’s net income and earnings per share would have been reduced to the pro forma amounts indicated below:

42

(in thousands, except per share amounts) Years ended December 31		2005			2004
Net income as reported		$	34,412		$	30,950
Stock-based compensation expense			(994	)		(558	)
Tax effect			141			142
Net income pro forma		$	33,559		$	30,534
Basic net income per share	As reported	$	2.31		$	2.09
	Pro forma		2.25			2.06
Diluted net income per share	As reported	$	2.27		$	2.05
	Pro forma		2.22			2.02

For further information, see note 14 to the consolidated financial statements below.

ØAccounting for Uncertainty in Income Taxes - In July 2006, the Financial Accounting Standards Board ("FASB") issued Interpretation No. 48 ("FIN 48"), Accounting for Uncertainty in Income Taxes - An Interpretation of FASB Statement No. 109. FIN 48 clarifies the accounting for uncertainty in income taxes recognized in accordance with FASB Statement No. 109, Accounting for Income Taxes. This statement also prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. FIN 48 also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. The evaluation of a tax position in accordance with this statement is a two-step process. The first step is a recognition process to determine whether it is more likely than not that a tax position will be sustained upon examination, including resolution of any related appeals or litigation processes, based on the technical merits of the position. The second step is a measurement process whereby a tax position that meets the more likely than not recognition threshold is calculated to determine the amount of benefit to recognize in the financial statements. FIN 48 is effective for fiscal years beginning after December 15, 2006 and the cumulative effect of applying the provisions of this statement will be recognized as an adjustment to the beginning balance of retained earnings. The Corporation is currently in the process of evaluating the impact of adopting FIN 48 on its consolidated financial statements.

ØFinancial Statements—Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements - In September 2006, the SEC issued Staff Accounting Bulletin ("SAB") 108, Financial Statements—Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements. This SAB provides guidance on the consideration of prior year misstatements in determining whether the current year's financial statements are materially misstated. In providing this guidance, the SEC staff references both the "iron curtain" and "rollover" approaches to quantifying a current year misstatement for purposes of determining materiality. The iron curtain approach focuses on how the current year's balance sheet would be affected in correcting misstatements without considering the year in which the misstatement originated. The rollover approach focuses on the amount of the misstatements that originated in the current year's income statement. The SEC staff indicates that registrants should quantify the impact of correcting all misstatements, including both the carryover and reversing effects of prior year misstatements, on the current year financial statements. SAB 108 is effective for fiscal years ending after November 15, 2006. Registrants may either restate their financials for any material misstatements arising from the application of this SAB or recognize a cumulative effect of applying SAB 108 within the current year opening balance in retained earnings. The adoption of SAB 108 did not have a material impact on our consolidated financial statements.

43

Reclassification - Certain reclassifications considered to be immaterial have been made in the prior year consolidated financial statements to conform to current year classifications.

2. Business Combinations

On June 10, 2005, Community Trust Bank, Inc., the bank subsidiary of Community Trust Bancorp, Inc., completed the acquisition of Heritage Community Bank of Danville, Kentucky. All former Heritage Community Bank offices now operate as branch offices of Community Trust Bank, Inc. Through this acquisition, we obtained loans totaling approximately $73.7 million, cash and cash equivalents of approximately $8.1 million, and deposits totaling approximately $69.8 million from this acquisition. The total cost of the acquisition, including direct acquisition costs, was $12.4 million. Goodwill and core deposit intangible of approximately $5.5 million was recorded. Pro forma information has not been presented since the impact of the acquisition is not significant to the consolidated financial statements.

3. Cash and Due from Banks

Included in cash and due from banks are noninterest bearing deposits that are required to be held at the Federal Reserve or maintained in vault cash in accordance with regulatory reserve requirements. The balance requirements were $37.8 million and $40.0 million at December 31, 2006 and 2005, respectively. Cash paid during the years ended 2006, 2005, and 2004 for interest was $79.6 million, $55.1 million, and $36.4 million, respectively. Cash paid during the same periods for income taxes was $12.7 million, $13.1 million and $11.5 million, respectively.

4. Securities

Amortized cost and fair value of securities at December 31, 2006 are as follows:

Available-for-Sale and Other

(in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
U.S. Treasury and government agencies	$	20,291	$	200	$	0		$	20,491
State and political subdivisions		44,887		709		(34	)		45,562
U.S. government sponsored agencies and mortgage-backed pass through certificates		245,038		430		(5,878	)		239,590
Collateralized mortgage obligations		1		0		0			1
Other debt securities		20,000		0		(443	)		19,557
Total debt securities		330,217		1,339		(6,355	)		325,201
Marketable equity securities		100,650		0		0			100,650
	$	430,867	$	1,339	$	(6,355	)	$	425,851

Held-to-Maturity

(in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
State and political subdivisions	$	3,068	$	19	$	(255	)	$	2,832
U.S. government sponsored agencies and mortgage-backed pass through certificates		37,440		0		(1,257	)		36,183
	$	40,508	$	19	$	(1,512	)	$	39,015

44

Amortized cost and fair value of securities at December 31, 2005 are as follows:

Available-for-Sale and Other

(in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
U.S. Treasury and government agencies	$	2,005	$	0	$	0		$	2,005
State and political subdivisions		45,911		1,058		(37	)		46,932
U.S. government sponsored agencies and mortgage-backed pass through certificates		295,822		773		(7,964	)		288,631
Collateralized mortgage obligations		1,003		9		0			1,012
Other debt securities		17,500		0		(509	)		16,991
Total debt securities		362,241		1,840		(8,510	)		355,571
Marketable equity securities		40,000		0		0			40,000
	$	402,241	$	1,840	$	(8,510	)	$	395,571

Held-to-Maturity

(in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
State and political subdivisions	$	3,134	$	39	$	(191	)	$	2,982
U.S. government sponsored agencies and mortgage-backed pass through certificates		45,310		0		(1,764	)		43,546
	$	48,444	$	39	$	(1,955	)	$	46,528

The amortized cost and fair value of securities at December 31, 2006 by contractual maturity are shown below. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

	Available-for-Sale				Held-to-Maturity
(in thousands)	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Due in one year or less	$	4,020	$	4,039	$	770	$	772
Due after one through five years		47,206		47,795		785		802
Due after five through ten years		13,952		14,219		0		0
Due after ten years		0		0		1,513		1,258
Mortgage-backed securities and collateralized mortgage obligations		245,039		239,591		37,440		36,183
Other securities		20,000		19,557		0		0
Total debt securities		330,217		325,201		40,508		39,015
Marketable equity securities		100,650		100,650		0		0
	$	430,867	$	425,851	$	40,508	$	39,015

There were no pre-tax gains or losses realized on sales and calls in 2006 and no significant gains or losses in 2005. Pre-tax gains of $0.8 million and losses of $0.2 million were realized on sales and calls in 2004.

Securities in the amount of $401 million and $350 million at December 31, 2006 and 2005, respectively, were pledged to secure public deposits, trust funds, repurchase agreements, and advances from the Federal Home Loan Bank.

We evaluate our investment portfolio on a quarterly basis for impairment. The analysis performed as of December 31, 2006 indicates that all impairment is considered temporary, due primarily to fluctuations in interest rates, and not credit-related. The following tables provide the amortized cost, gross unrealized losses, and fair value, aggregated by investment category and length of time the individual securities have been in a continuous unrealized loss position as of December 31, 2006.

45

Available-for-Sale

(in thousands)	Amortized Cost		Gross Unrealized Losses			Fair Value
Less Than 12 Months
States and political subdivision	$	2,828	$	(10	)	$	2,818
U.S. government sponsored agencies and mortgage-backed pass through certificates		48,272		(767	)		47,505
Other debt securities		2,500		(55	)		2,445
		53,600		(832	)		52,768
12 Months or More
States and political subdivision		2,701		(24	)		2,677
U.S. government sponsored agencies and mortgage-backed pass through certificates		174,543		(5,111	)		169,432
Other debt securities		17,500		(388	)		17,112
		194,744		(5,523	)		189,221
Total
States and political subdivision		5,529		(34	)		5,495
U.S. government sponsored agencies and mortgage-backed pass through certificates		222,815		(5,878	)		216,937
Other debt securities		20,000		(443	)		19,557
	$	248,344	$	(6,355	)	$	241,989

Held-to-Maturity

(in thousands)	Amortized Cost		Gross Unrealized Losses			Fair Value
12 Months or More
States and political subdivision	$	1,512	$	(255	)	$	1,257
U.S. government sponsored agencies and mortgage-backed pass through certificates		37,440		(1,257	)		36,183
	$	38,952	$	(1,512	)	$	37,440

The analysis performed as of December 31, 2005 indicated that all impairment was considered temporary, due primarily to fluctuations in interest rates, and not credit-related. The following tables provide the amortized cost, gross unrealized losses, and fair value, aggregated by investment category and length of time the individual securities have been in a continuous unrealized loss position as of December 31, 2005.

Available-for-Sale

(in thousands)	Amortized Cost		Gross Unrealized Losses			Fair Value
Less Than 12 Months
States and political subdivision	$	4,701	$	(37	)	$	4,664
U.S. government sponsored agencies and mortgage-backed pass through certificates		22,669		(723	)		21,946
Other debt securities		7,500		(218	)		7,282
		34,870		(978	)		33,892
12 Months or More
U.S. government sponsored agencies and mortgage-backed pass through certificates		244,899		(7,241	)		237,658
Other debt securities		10,000		(291	)		9,709
	$	254,899	$	(7,532	)	$	247,367

46

Total
States and political subdivision	$	4,701	$	(37	)	$	4,664
U.S. government sponsored agencies and mortgage-backed pass through certificates		267,568		(7,964	)		259,604
Other debt securities		17,500		(509	)		16,991
	$	289,769	$	(8,510	)	$	281,259

Held-to-Maturity

(in thousands)	Amortized Cost		Gross Unrealized Losses			Fair Value
Less Than 12 Months
States and political subdivision	$	1,545	$	(191	)	$	1,354
12 Months or More
U.S. government sponsored agencies and mortgage-backed pass through certificates		45,311		(1,764	)		43,547
Total
States and political subdivision		1,545		(191	)		1,354
U.S. government sponsored agencies and mortgage-backed pass through certificates		45,311		(1,764	)		43,547
	$	46,856	$	(1,955	)	$	44,901

5. Loans

Major classifications of loans, net of unearned income and deferred loan origination costs, are summarized as follows:

(in thousands) December 31	2006		2005
Commercial construction	$	133,902	$	115,721
Commercial secured by real estate		632,881		665,911
Commercial other		337,075		301,828
Real estate construction		50,588		51,232
Real estate mortgage		579,197		542,809
Consumer		422,291		414,920
Equipment lease financing		11,524		14,923
	$	2,167,458	$	2,107,344

Not included in the loan balances above were loans held for sale in the amount of $1.4 million and $0.1 million at December 31, 2006 and 2005, respectively.

The amount of loans on a non-accruing income status was $9.9 million, $12.2 million, and $13.8 million at December 31, 2006, December 31, 2005, and December 31, 2004, respectively. The total of loans on nonaccrual that were in homogeneous pools and not evaluated individually for impairment were $2.6 million, $4.1 million, and $5.0 million at December 31, 2006, December 31, 2005, and December 31, 2004, respectively. Additional interest which would have been recorded during 2006, 2005, and 2004 if such loans had been accruing interest was approximately $1.0 million, $1.3 million, and $0.9 million, respectively. Any loan greater than 90 days past due must be well secured and in the process of collection to continue accruing interest. The amount of loans 90 days or more past due and still accruing interest was $4.3 million, $8.3 million, and $5.3 million at December 31, 2006, 2005, and 2004, respectively.

47

At December 31, 2006, 2005, and 2004, the recorded investment in impaired loans was $7.3 million, $8.1 million, and $8.8 million, respectively. Included in these amounts at December 31, 2006, 2005, and 2004, respectively, were $4.4 million, $5.1 million, and $6.8 million of impaired loans for which specific reserves for loan losses were carried in the amounts of $1.5 million, $2.3 million, and $3.1 million. The average investment in impaired loans for 2006, 2005, and 2004 was $7.4 million, $9.0 million, and $8.9 million, respectively, while interest income of $0.2 million, $0.1 million, and $0.1 million was recognized on cash payments of $0.9 million, $1.6 million, and $0.4 million.

6. Mortgage Banking Activities

Mortgage banking activities primarily include residential mortgage originations and servicing. The following table presents the components of mortgage banking noninterest income.

(in thousands) Year Ended December 31	2006		2005		2004
Net gain on sale of loans held for sale	$	1,265	$	1,480	$	1,619
Net loan servicing income (expense)		302		559		385
Mortgage banking income	$	1,567	$	2,039	$	2,004

At December 31, 2006, 2005, and 2004, loans serviced for the benefit of others (primarily FHLMC) totaled $362 million, $372 million, and $377 million, respectively. Servicing loans for others generally consists of collecting mortgage payments, maintaining escrow accounts, disbursing payments to investors, and processing foreclosures. Net loan servicing income (expense) reflected in the above table includes amortization of servicing rights noted below and loan servicing income of $0.9 million for each of the years ended December 31, 2006, 2005, and 2004.

Activity for capitalized mortgage servicing rights was as follows:

(in thousands)	2006			2005			2004
Balance, beginning of year	$	3,660		$	4,225		$	6,054
Additions		321			381			480
Amortized to expense		(591	)		(638	)		(595	)
Valuation adjustments		0			(308	)		(1,714	)
Balance, end of year	$	3,390		$	3,660		$	4,225
Valuation allowance (included in above)	$	0		$	0		$	(615	)

The fair values of capitalized mortgage servicing rights were $3.4 million, $3.9 million, and $3.7 million at December 31, 2006, 2005, and 2004, respectively. Fair values for the years ended December 31, 2006, 2005, and 2004 were determined by third party valuations using discount rates of 10.61%, 9.14%, and 9.16%, respectively, prepayment speeds ranging from 135% to 389%, 130% to 327%, and 94% to 335%, respectively, depending on the stratifications of the specific rights, and weighted average default rates of 1.3%, 1.1%, and 1.3%, respectively.

Amortization expense for the next five years is estimated at approximately $0.6 million annually; however, actual amortization expense will be impacted by serviced loan payoffs that occur during each year.

48

7. Related Party Transactions

In the ordinary course of business, our banking subsidiary has made loans and had transactions with certain directors and executive officers of our Corporation or its subsidiaries, including their associates (as defined by the Securities and Exchange Commission). We believe such loans and transactions were made on substantially the same terms, including interest rate and collateral, as those prevailing at the same time for comparable transactions with other persons. The aggregate amount of related party loans at January 1, 2006 was $32.8 million. During 2006, activity with respect to these loans included new loans of $8.0 million, repayment of $16.0 million, and a net decrease of $0.4 million resulting from the change in status of executive officers and directors. As a result of these activities, the aggregate balance of related party loans was $24.4 million at December 31, 2006. The aggregate balances of related party deposits at December 31, 2006 and 2005 were $28.5 million and $11.4 million, respectively.

8. Allowance for Loan and Lease Losses

Activity in the allowance for loan and lease losses was as follows:

(in thousands)	2006			2005			2004
Balance, beginning of year	$	29,506		$	27,017		$	24,653
Provision charged to operations		4,305			8,285			8,648
Recoveries		3,145			3,413			3,304
Charge-offs		(9,430	)		(10,968	)		(9,588	)
Allowance of acquired bank		0			1,759			0
Balance, end of year	$	27,526		$	29,506		$	27,017

9. Premises and Equipment

Premises and equipment are summarized as follows:

(in thousands) December 31	2006			2005
Land and buildings	$	64,396		$	63,401
Leasehold improvements		5,727			5,749
Furniture, fixtures, and equipment		38,934			37,010
Construction in progress		1,615			1,553
		110,672			107,713
Less accumulated depreciation and amortization		(55,007	)		(49,747	)
	$	55,665		$	57,966

Depreciation and amortization of premises and equipment for 2006, 2005, and 2004 was $5.2 million, $4.5 million, and $3.9 million, respectively.

10. Deposits

Major classifications of deposits are categorized as follows:

(in thousands) December 31	2006		2005
Noninterest bearing deposits	$	429,994	$	445,929
NOW accounts		18,107		19,542
Money market deposits		472,340		383,070
Savings		196,923		215,210
Certificates of deposit of $100,000 or more		438,080		411,749
Certificates of deposit less than $100,000 and other time deposits		785,723		771,051
	$	2,341,167	$	2,246,551

49

Interest expense on deposits is categorized as follows:

(in thousands)	2006		2005		2004
Savings, NOW, and money market accounts	$	15,399	$	8,787	$	5,360
Certificates of deposit of $100,000 or more		17,663		12,635		8,080
Certificates of deposit less than $100,000 and other time deposits		30,794		21,590		15,020
	$	63,856	$	43,012	$	28,460

Maturities of certificates of deposits and other time deposits are presented below:

	Maturities by Period at December 31, 2006
(in thousands)	Total		Within 1 Year		2 Years		3 Years		4 Years		5 Years		After 5 Years
Certificates of deposits of $100,000 or more	$	438,080	$	399,325	$	20,169	$	8,317	$	7,372	$	2,897	$	0
Certificates of deposit less than $100,000 and other time deposits		785,723		707,230		46,175		15,278		10,696		5,852		492
	$	1,223,803	$	1,106,555	$	66,344	$	23,595	$	18,068	$	8,749	$	492

11. Advances from Federal Home Loan Bank

Federal Home Loan Bank ("FHLB") advances consisted of the following monthly amortizing and term borrowings at December 31:

(in thousands)	2006		2005
Monthly amortizing	$	1,245	$	1,834
Term		80,000		121,000
	$	81,245	$	122,834

The advances from the FHLB that require monthly principal payments were due for repayment as follows:

	Principal Payments Due by Period at December 31, 2006
(in thousands)	Total		Within 1 Year		2 Years		3 Years		4 Years		5 Years		After 5 Years
Outstanding advances, weighted average interest rate - 4.51%	$	1,245	$	355	$	172	$	51	$	613	$	8	$	46

	Principal Payments Due by Period at December 31, 2005
(in thousands)	Total		Within 1 Year		2 Years		3 Years		4 Years		5 Years		After 5 Years
Outstanding advances, weighted average interest rate - 5.06%	$	1,834	$	632	$	312	$	172	$	51	$	613	$	54

50

The term advances that require the total payment to be made at maturity follow:

(in thousands) December 31		2006		2005
Advance #144, 2.88%, due 8/30/06	$	0	$	40,000
Advance #145, 3.31%, due 8/30/07		40,000		40,000
Advance #146, 3.70%, due 8/30/08		40,000		40,000
Advance #148, 1.76%, due 6/6/13		0		1,000
	$	80,000	$	121,000

Advances totaling $81.2 million at December 31, 2006 were collateralized by FHLB stock of $23.7 million and a blanket lien on all qualifying 1-4 family first mortgage loans. As of December 31, 2006, the Corporation had a $412 million FHLB borrowing capacity, leaving $331 million available for additional advances. The advances had fixed interest rates ranging from 1.00% to 6.90% with a weighted average rate of 3.52%. The term advance #148 was obtained in connection with the acquisition of Heritage Community Bank of Danville on June 10, 2005 and was prepaid without penalty on June 6, 2006. The advances are subject to restrictions or penalties in the event of prepayment.

12. Borrowings

Short-term debt is categorized as follows:

(in thousands) December 31	2006		2005
Subsidiaries:
Repurchase agreements	$	161,630	$	129,156
Federal funds purchased		15,940		17,485
	$	177,570	$	146,641

On April 28, 2006, we entered into a revolving note agreement for a line of credit in the amount of $12 million, all of which is currently available to meet any future cash needs. The agreement will mature on April 28, 2007. We expect to renew this agreement upon maturity.

All federal funds purchased and the majority of repurchase agreements mature and reprice daily. The average rates paid for federal funds purchased and repurchase agreements on December 31, 2006 were 5.10% and 4.87%, respectively.

The maximum balance for federal funds purchased and repurchase agreements at any month-end during 2006 occurred at May 31, 2006, with a month-end balance of $220.2 million.

Long-term debt is categorized as follows:

(in thousands) December 31	2006		2005
Parent:
Junior subordinated debentures, 9.00%, due 3/31/27	$	35,568	$	35,568
Junior subordinated debentures, 8.25%, due 3/31/32		25,773		25,773
	$	61,341	$	61,341

Although the junior subordinated debentures mature on March 31, 2027 and March 31, 2032, they are subject to early mandatory redemption in whole under certain limited circumstances and are callable at par in whole or in part anytime after March 31, 2007.

51

On January 24, 2007, we announced that our Board of Directors has authorized the redemption of all outstanding trust preferred securities at a redemption price equal to the principal amount of each security plus accrued and unpaid interest through the date of redemption. Approximately $59.5 million principal amount of trust preferred securities are currently outstanding, of which $34.5 million principal amount was issued in 1997 and $25 million principal amount was issued in 2002. The trust preferred securities are expected to be redeemed effective March 31, 2007, by the related trusts. We expect to incur a pre-tax charge from the unamortized debt issuance costs of approximately $1.9 million in the first quarter of 2007 as a result of the redemption of the debentures and trust preferred securities.

The redemption of the trust preferred securities is being made in connection with the concurrent redemption by the Corporation of all of our outstanding 9.0% Subordinated Debentures in the aggregate principal amount of approximately $36 million and 8.25% Subordinated Debentures in the aggregate principal amount of approximately $26 million. We expect to fund the redemption with the proceeds of a private placement of pooled trust preferred securities.

The new trust preferred securities are expected to have a fixed interest rate for five years and a floating rate of interest at a spread to be above the three-month LIBOR rate thereafter. The new trust preferred securities will have a 30-year term, but will be redeemable beginning five years from the date of issuance.

We estimate that the combined effect of the redemption of the debentures and trust preferred securities will reduce our interest expense by approximately $1.0 million in 2007 and $1.4 million annually through 2011. After giving effect to the redemption and issuance of new trust preferred securities, the Company’s capital ratios will remain unchanged.As of December 31, 2006, we are not aware of any current recommendations by banking regulatory authorities which, if they were to be implemented, would have, or are reasonably likely to have, a material adverse impact on the Corporation’s liquidity, capital resources, or operations.

13. Federal Income Taxes

The components of the provision for income taxes, exclusive of tax effect of unrealized securities gains, are as follows:

(in thousands)	2006		2005		2004
Current income taxes	$	12,357	$	14,661	$	11,050
Deferred income taxes		4,193		745		1,886
	$	16,550	$	15,406	$	12,936

A reconciliation of income tax expense at the statutory rate to our actual income tax expense is shown below:

(in thousands)	2006					2005					2004
Computed at the statutory rate	$	19,465		35.00	%	$	17,436		35.00	%	$	15,360		35.00	%
Increase (decrease) resulting from
Tax-exempt interest		(869	)	(1.56	)		(916	)	(1.84	)		(945	)	(2.15	)
Housing and new markets credit		(437	)	(0.79	)		(406	)	(0.81	)		(498	)	(1.13	)
Dividends received deduction		(1,313	)	(2.36	)		(361	)	(0.72	)		(168	)	(0.38	)
Bank owned life insurance		(362	)	(0.65	)		(203	)	(0.41	)		(204	)	(0.46	)
Other, net		66		0.12			(144	)	(0.29	)		(609	)	(1.39	)
Total	$	16,550		29.76	%	$	15,406		30.93	%	$	12,936		29.48	%

52

The components of the net deferred tax liability as of December 31 are as follows:

(in thousands)	2006			2005
Deferred tax assets
Allowance for loan and lease losses	$	9,018		$	9,711
Interest on nonperforming loans		699			865
Accrued expenses		582			334
Capitalized lease obligations		546			5
Dealer reserve valuation		622			567
Unrealized losses on available-for-sale securities		1,755			2,334
Other		487			152
Total deferred tax assets		13,709			13,968
Deferred tax liabilities
Depreciation and amortization		(9,989	)		(8,735	)
FHLB stock dividends		(4,430	)		(3,964	)
Loan fee income		(2,764	)		0
Mortgage servicing rights		(1,186	)		(1,281	)
Other		(339	)		(215	)
Total deferred tax liabilities		(18,708	)		(14,195	)
Net deferred tax liability	$	(4,999	)	$	(227	)

14. Employee Benefits

On December 31, 2006 the Corporation had a KSOP plan covering substantially all employees. Half of the first 8% of wages contributed by an employee is matched and goes into the savings and retirement portion of the plan. Employees may contribute additional non-matched amounts up to maximum limits provided by IRS regulations, and the Corporation may at its discretion, contribute an additional percentage of covered employees’ gross wages.

The Corporation currently contributes 4% of covered employees’ gross wages to the employee stock ownership plan (ESOP) portion of the plan. The ESOP uses the contribution to acquire shares of the Corporation’s common stock. The KSOP plan owned 1,074,728 shares of Corporation stock at December 31, 2006. The ESOP plan owned 553,758 shares of Corporation stock at December 31, 2006 while the 401K held 520,970 shares. Substantially all shares owned by the KSOP were allocated to employees’ accounts at December 31, 2006. The market price of the shares at the date of allocation is essentially the same as the market price at the date of purchase.

On January 1, 2007 the Corporation amended its KSOP plan, creating a separate Employee Stock Ownership Plan (ESOP) and a separate 401K plan.

The total retirement plan expense, including KSOP expense, for 2006, 2005, and 2004 was $2.1 million, $2.0 million, and $1.8 million, respectively.

53

Stock-Based Compensation:

We currently maintain one active and two inactive incentive stock option plans covering key employees. The 2006 Stock Option Plan ("2006 Plan") was approved by the Board of Directors and the Shareholders in 2006. The following table provides detail of the number of shares to be issued upon exercise of outstanding stock-based awards and remaining shares available for future issuance under all of the Corporation’s equity compensation plans as of December 31, 2006:

(shares in thousands) Plan Category	Number of Shares to Issued Upon Exercise	Weighted Average Price	Shares Available for Future Issuance
Equity compensation plans approved by shareholders:
Stock options	0	-	1,646 (a)
Restricted stock	0 (c)	(b)	(a)
Performance units	(d)	(b)	(a)
Stock appreciation rights (“SARs”)	(e)	(b)	(a)
Total			1,646

(a)   Under the 2006 Stock Ownership Incentive Plan, 1.5 million shares (plus any shares reserved for issuance under the 1998 Stock Option Plan were authorized for issuance as nonqualified and incentive stock options, SARS, restricted stock, and performance units. As of December 31, 2006 all shares remained available for issuance.

(b)   Not applicable

(c)   No shares of restricted stock have been issued. The maximum number of shares of restricted stock that may be granted to a participant during any calendar year is 40,000 shares.

(d)   No performance units have been issued. The maximum payment that can be made pursuant to performance units granted to any one participant in any calendar year shall be $250,000.

(e)   No SARS have been issued. The maximum number of shares with respect to which SARs may be granted to a participant during any calendar year shall be 100,000 shares.

The 2006 Plan reserved 1,500,000 shares for issuance, all of which were available at December 31, 2006 for future grants. In addition, any shares reserved for issuance under the 1998 Stock Option Plan ("1998 Plan") in excess of the number of shares as to which options or other benefits are awarded there under, plus any shares as to which options or other benefits granted under the 1998 Plan may lapse, expire, terminate, or be canceled, shall also be reserved and available for issuance or reissuance under the 2006 Plan. The 1998 Plan was approved by the Board of Directors and the Shareholders in 1998. The 1998 Plan had 1,046,831 shares authorized, 145,577 of which were available at December 31, 2006 for future grants. The 1989 Stock Option Plan ("1989 Plan") was approved by the Board of Directors and the Shareholders in 1989. The 1989 Stock Option Plan ("1989 Plan") has no remaining options available for grant.

We use the following assumptions, which are evaluated and revised as necessary, in estimating the grant-date fair value of each option grant for the year end:

	2006	2005	2004
Expected option life (in years)	7.5	6.5	6.8
Expected volatility	0.364	0.960	0.756
Expected Dividend yield	3.21%	3.11%	3.02%
Risk-free interest rate	4.53%	3.92%	3.70%

For 2006 the expected option life was derived from the "safe-harbor" rules for estimating option life in SFAS No. 123R. For 2005 and 2004 the expected option life was derived from historical exercise patterns and expected life. The expected volatility is based on historical volatility of the stock using a historical look back that approximates the expected life of the option grant. The interest rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of the grant. Our stock based compensation expense for the year 2006 was $655 thousand.

54

The Corporation’s stock option activity for the 1998 Plan for the years ended December 31, 2006, 2005, and 2004 is summarized as follows:

December 31	2006					2005					2004
	Options			Weighted Average Exercise Price		Options			Weighted Average Exercise Price		Options			Weighted Average Exercise Price
Outstanding at beginning of year		621,493		$	20.77		614,061		$	18.25		600,913		$	16.75
Granted		116,900			32.44		107,996			30.88		75,900			27.77
Exercised		(96,030	)		16.73		(61,810	)		14.54		(52,292	)		15.07
Forfeited/expired		(9,499	)		27.65		(38,754	)		18.99		(10,460	)		17.07
Outstanding at end of year		632,864		$	23.44		621,493		$	20.77		614,061		$	18.25
Exercisable at end of year		170,407		$	17.36		115,440		$	16.60		112,185		$	15.81

The 1998 Stock Option Plan had options with the following remaining lives at December 31, 2006:

1998 Option Plan
Remaining Life	Outstanding Options	Weighted Average Price
Two years	45,603	$ 15.36
Three years	21,716	13.23
Four years	42,956	11.83
Five years	183,846	19.09
Six years	60,149	20.99
Seven years	71,501	27.81
Eight years	93,512	30.88
Nine years	113,581	32.44
Total outstanding	632,864
Weighted average price		$ 23.44

The weighted-average fair value of options granted from the 1998 plan during the years 2006, 2005, and 2004 was $1.2 million, $1.1 million and $0.6 million or $10.51, $9.72, and $7.75 per share, respectively. The total intrinsic value of options exercised during the years ended December 31, 2006, 2005, and 2004 were $2.5 million, $2.3 million and $0.9 million, respectively.

A summary of the status of our nonvested shares as of December 31, 2006 and changes during the year ended December 31, 2006 is presented below:

(shares in thousands) Nonvested Shares	Shares	Weighted-Average Grant-Date Fair Value
Nonvested at January 1, 2006	506,053	$ 4.69
Granted	116,900	10.51
Vested	151,469	3.31
Forfeited	9,027	(7.02)
Nonvested at December 31, 2006	462,457	$ 6.57

As of December 31, 2006 there was $1.0 million of total unrecognized compensation cost related to nonvested share-based compensation arrangements granted under the plan. That cost is expected to be recognized over a weighted-average period of 1.8 years. The total grant-date fair value of shares vested during the years ended December 31, 2006, 2005, and 2004, was $0.5 million, $0.2 million and $0.2 million, respectively.

55

The 1989 Plan has no remaining options available for grant. The maximum term is ten years. Options granted as management retention options vest after five years; all other options vest ratably over four years.

The Corporation’s stock option activity for the 1989 Plan for the years ended December 31, 2006, 2005, and 2004 is summarized as follows:

December 31	2006					2005					2004
	Options			Weighted Average Exercise Price		Options			Weighted Average Exercise Price		Options			Weighted Average Exercise Price
Outstanding at beginning of year		36,619		$	14.65		93,645		$	13.29		107,852		$	13.35
Exercised		(31,787	)		13.94		(57,026	)		12.42		(13,212	)		13.28
Forfeited/expired		0			0.00		0			0.00		(995	)		19.47
Outstanding at end of year		4,832		$	19.33		36,619		$	14.65		93,645		$	13.29
Exercisable at end of year		4,832		$	19.33		36,619		$	14.65		93,645		$	13.29

The 1989 Stock Option Plan had options with the following remaining lives at December 31, 2006:

1989 Option Plan
Remaining Life	Outstanding Options	Weighted Average Price
One year or less	4,832	$ 19.33
Total outstanding	4,832
Weighted average price		$ 19.33

No options were granted in 2006, 2005, or 2004 from the 1989 Plan.

15. Operating Leases

Certain premises and equipment are leased under operating leases. Additionally, certain premises are leased or subleased to third parties. Minimum non-cancellable rental payments and rental receipts are as follows:

(in thousands)	Payments		Receipts
2007	$	1,475	$	622
2008		1,089		408
2009		855		229
2010		747		210
2011		729		175
Thereafter		4,984		124
	$	9,879	$	1,768

Rental expense net of rental income under operating leases was $0.8 million in 2006, $0.7 million in 2005, and $0.5 million in 2004.

56

16. Fair Market Value of Financial Instruments

The following methods and assumptions were used to estimate the fair value of each class of financial instruments for which it is practicable to estimate that value:

Cash and Cash Equivalents - The carrying amount approximates fair value.

Securities - Fair values are based on quoted market prices or dealer quotes.

Loans (net of the allowance for loan and lease losses) - The fair value of fixed rate loans and variable rate mortgage loans is estimated by discounting the future cash flows using current rates at which similar loans would be made to borrowers with similar credit ratings and for the same remaining maturities. For other variable rate loans, the carrying amount approximates fair value.

Loans Held for Sale - The fair value is predetermined based on sale price.

Federal Reserve Bank Stock - The carrying value of Federal Reserve Bank stock approximates fair value based on the redemption provisions of the Federal Reserve Bank.

Federal Home Loan Bank Stock - The carrying value of Federal Home Loan Bank stock approximates fair value based on the redemption provisions of the Federal Home Loan Bank.

Accrued Interest Receivable - The carrying amount approximates fair value.

Capitalized Mortgage Servicing Rights - The fair value is obtained by use of an independent third party.

Deposits - The fair value of deposits is estimated by discounting the future cash flows using the rates currently offered for deposits of similar remaining maturities.

Short-term Borrowings - The carrying amount approximates fair value.

Advances from Federal Home Loan Bank - The fair value of these fixed-maturity advances is estimated by discounting future cash flows using rates currently offered for advances of similar remaining maturities.

Long-term Debt - The fair value is estimated by discounting future cash flows using current rates.

Accrued Interest Payable - The carrying amount approximates fair value.

Other Financial Instruments - The estimated fair value for other financial instruments and off-balance sheet loan commitments approximates cost at December 31, 2006 and 2005. Off-balance sheet loan commitments at December 31, 2006 and 2005 were $478.9 million and $435.9 million, respectively.

57

Commitments to Extend Credit - The fair value of commitments to extend credit is based upon the difference between the interest rate at which we are committed to make the loans and the current rates at which similar loans would be made to borrowers with similar credit ratings and for the same remaining maturities, adjusted for the estimated volume of loan commitments actually expected to close. The fair value of such commitments is not material.

(in thousands) December 31	2006				2005
	Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value
Financial assets
Cash and cash equivalents	$	157,538	$	157,538	$	122,211	$	122,211
Securities		494,386		492,893		470,697		468,781
Loans (net of ALLL)		2,139,932		2,104,378		2,077,838		2,069,703
Loans held for sale		1,431		1,451		135		137
Federal Reserve Bank stock		4,290		4,290		4,275		4,275
Federal Home Loan Bank stock		23,737		23,737		22,407		22,407
Accrued interest receivable		17,321		17,321		14,316		14,316
Capitalized mortgage servicing rights		3,390		3,416		3,660		3,935
	$	2,842,025	$	2,805,024	$	2,715,539	$	2,705,765
Financial liabilities
Deposits	$	2,341,167	$	2,341,474	$	2,246,551	$	2,236,357
Short-term borrowings		177,570		177,853		146,641		146,308
Advances from Federal Home Loan Bank		81,245		78,281		122,834		117,260
Long-term debt		61,341		60,415		61,341		61,412
Accrued interest payable		7,241		7,241		5,327		5,327
	$	2,668,564	$	2,665,264	$	2,582,694	$	2,566,664

17. Off-Balance Sheet Transactions and Guarantees

The Bank is a party to transactions with off-balance sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include standby letters of credit and commitments to extend credit in the form of unused lines of credit. The Bank uses the same credit policies in making commitments and conditional obligations as it does for on-balance sheet instruments.

At December 31, the Bank had the following off-balance sheet financial instruments, whose approximate contract amounts represent additional credit risk to the Corporation:

(in thousands)	2006		2005
Standby letters of credit	$	54,823	$	54,948
Commitments to extend credit		424,034		380,904

Standby letters of credit represent conditional commitments to guarantee the performance of a third party. The credit risk involved is essentially the same as the risk involved in making loans. At December 31, 2006, we maintained a credit loss reserve of approximately $22 thousand relating to these financial standby letters of credit. The reserve coverage calculation was determined using essentially the same methodology used for the allowance for loan and lease losses. Approximately 90% of the total standby letters of credit are secured, with $41.7 million of the total $54.8 million secured by cash. Collateral for the remaining secured standby letters of credit varies but is comprised primarily of accounts receivable, inventory, property, equipment, and income-producing properties.

58

Commitments to extend credit are agreements to lend to a customer as long as there is no violation of the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. The Bank evaluates each customer’s credit-worthiness on a case-by-case basis. Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. A portion of the commitments is to extend credit at fixed rates. Fixed rate loan commitments at December 31, 2006 of $19.1 million had interest rates and terms ranging predominantly from 6.00% to 7.99% and 6 months to 1 year, respectively. These credit commitments were based on prevailing rates, terms, and conditions applicable to other loans being made at December 31, 2006.

18. Concentrations of Credit Risk

The Corporation’s banking subsidiary grants commercial, residential, and consumer loans to customers primarily located in eastern, northeastern, central, and south central Kentucky and southern West Virginia. The Bank is continuing to manage all components of its portfolio mix in a manner to reduce risk from changes in economic conditions. Concentrations of credit, as defined for regulatory purposes, are reviewed quarterly by management to ensure that internally established limits based on Tier 1 Capital plus the allowance for loan and lease losses are not exceeded. At December 31, 2006 and 2005, our concentrations of hotel/motel industry credits were 43% and 44% of Tier 1 Capital plus the allowance for loan and lease losses, respectively. Coal mining and related support industries credits at December 31, 2006 and 2005 based on established limits were 33% and 39% of Tier 1 Capital plus the allowance for loan and lease losses, respectively. Lessors of residential buildings and dwellings credits at December 31, 2006 and 2005 were 28% and 31% of Tier 1 Capital plus the allowance for loan and lease losses, respectively. Single family construction credits at December 31, 2006 and 2005 were 25% and 30% of Tier 1 Capital plus the allowance for loan and lease losses, respectively. These percentages are within our internally established limits regarding concentrations of credit.

19. Commitments and Contingencies

Our Corporation and subsidiaries, and from time to time, our officers, are named defendants in legal actions arising from ordinary business activities. Management, after consultation with legal counsel, believes any pending actions are without merit or that the ultimate liability, if any, will not materially affect our consolidated financial position or results of operations.

20. Regulatory Matters

Our principal source of funds is dividends received from our subsidiary bank. Regulations limit the amount of dividends that may be paid by our banking subsidiary without prior approval. During 2007, approximately $48.8 million plus any 2007 net profits can be paid by our banking subsidiary 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, 2006 and 2005. We believe, as of December 31, 2006, the Corporation meets all capital adequacy requirements for which it is subject to be defined as well-capitalized under the regulatory framework for prompt corrective action.

59

Under the current Federal Reserve Board’s regulatory framework, certain capital securities offered by wholly owned unconsolidated trust preferred entities of the Corporation 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. Internationally active BHCs, defined as those with consolidated assets greater than $250 billion or on-balance sheet foreign exposure greater than $10 billion, are subject to a 15 percent limit, but they may include qualifying mandatory convertible preferred securities up to the generally applicable 25 percent limit. Amounts of restricted core capital elements in excess of these limits generally may be included in Tier 2 capital. The final rule provides a five-year transition period, ending 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		To Be Well-Capitalized Under Prompt Corrective Action Provision
(in thousands)		Amount	Ratio	Amount	Ratio	Amount	Ratio
As of December 31, 2006:
Tier 1 capital
	(to average assets)	$276,898	9.58%	$115,615	4.00%	$144,519	5.00%
Tier 1 capital
	(to risk weighted assets)	276,898	12.21%	90,712	4.00%	136,068	6.00%
Total capital
	(to risk weighted assets)	304,594	13.43%	181,441	8.00%	226,801	10.00%
As of December 31, 2005:
Tier 1 capital
	(to average assets)	$250,375	8.94%	$112,025	4.00%	$140,031	5.00%
Tier 1 capital
	(to risk weighted assets)	250,375	11.52%	86,936	4.00%	130,404	6.00%
Total capital
	(to risk weighted assets)	277,520	12.76%	173,994	8.00%	217,492	10.00%

60

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, 2006:
Tier 1 capital
	(to average assets)	$267,974	9.30%	$115,258	4.00%	$144,072	5.00%
Tier 1 capital
	(to risk weighted assets)	267,974	11.83%	90,608	4.00%	135,912	6.00%
Total capital
	(to risk weighted assets)	295,670	13.05%	181,254	8.00%	226,567	10.00%
As of December 31, 2005:
Tier 1 capital
	(to average assets)	$240,154	8.60%	$111,700	4.00%	$139,624	5.00%
Tier 1 capital
	(to risk weighted assets)	240,154	11.07%	86,777	4.00%	130,165	6.00%
Total capital
	(to risk weighted assets)	267,299	12.32%	173,571	8.00%	216,963	10.00%

21. Parent Company Financial Statements

Condensed Balance Sheets

(in thousands) December 31	2006		2005
Assets:
Cash on deposit	$	4,959	$	4,876
Investment in and advances to subsidiaries		333,709		303,173
Excess of cost over net assets acquired (net of accumulated amortization)		4,973		4,973
Other assets		1,968		6,213
Total assets	$	345,609	$	319,235
Liabilities and shareholders’ equity:
Subordinated debt	$	61,341	$	61,341
Other liabilities		1,893		3,949
Total liabilities		63,234		65,290
Shareholders’ equity		282,375		253,945
Total liabilities and shareholders’ equity	$	345,609	$	319,235

61

Condensed Statements of Income

(in thousands) Year Ended December 31	2006			2005			2004
Income:
Dividends from subsidiary banks	$	14,410		$	17,160		$	17,810
Securities gains/losses		0			0			51
Other income		42			232			237
Total income		14,452			17,392			18,098
Expenses:
Interest expense		5,414			5,414			5,414
Other expenses		848			1,006			1,096
Total expenses		6,262			6,420			6,510
Income before income taxes and equity in undistributed income of subsidiaries		8,190			10,972			11,588
Applicable income taxes		(2,123	)		(2,167	)		(2,609	)
Income before equity in undistributed income of subsidiaries		10,313			13,139			14,197
Equity in undistributed income of subsidiaries		28,751			21,273			16,753
Net income	$	39,064		$	34,412		$	30,950

Condensed Statements of Cash Flows

(in thousands) Year Ended December 31	2006			2005			2004
Cash flows from operating activities:
Net income	$	39,064		$	34,412		$	30,950
Adjustments to reconcile net income to net cash provided by operating activities:
Gains on sales of assets		0			0			(51	)
Equity in undistributed earnings of subsidiaries		(28,751	)		(21,273	)		(16,753	)
Change in other assets and liabilities, net		(166	)		(1,893	)		(841	)
Net cash provided by operating activities		10,147			11,246			13,305
Cash flows from investing activities:
Repayment of investments in and advances to subsidiaries		(711	)		0			0
Proceeds from sale of investment securities		0			0			250
Other		2,356			0			0
Net cash provided by investing activities		1,645			0			250
Cash flows from financing activities:
Dividends paid		(15,852	)		(14,619	)		(12,854	)
Issuance of common stock		3,182			3,364			1,831
Purchase of common stock		0			0			(1,400	)
Other		961			0			46
Net cash used in financing activities		(11,709	)		(11,255	)		(12,377	)
Net increase (decrease) in cash and cash equivalents		83			(9	)		1,178
Cash and cash equivalents at beginning of year		4,876			4,885			3,707
Cash and cash equivalents at end of year	$	4,959		$	4,876		$	4,885

62

22. Earnings Per Share

The following table sets forth the computation of basic and diluted earnings per share:

Year Ended December 31	2006		2005		2004
Numerator:
Net income (in thousands)	$	39,064	$	34,412	$	30,950
Denominator:
Basic earnings per share:
Weighted average shares		15,086,478		14,907,706		14,811,493
Diluted earnings per share:
Effect of dilutive securities - stock options		213,420		231,710		270,985
Adjusted weighted average shares		15,299,898		15,139,416		15,082,478
Earnings per share:
Basic earnings per share	$	2.59	$	2.31	$	2.09
Diluted earnings per share		2.55		2.27		2.05

At December 31, 2006 and 2005, all outstanding stock options were used in the computation of diluted earnings per share. At December 31, 2004, 33,000 stock options at a price of $28.64 were outstanding and were not used in the computation of diluted earnings per share because their exercise price was greater than the average market value of the common stock.

23. Accumulated Other Comprehensive Income

The Corporation has elected to present the disclosure required by SFAS No. 130, Reporting Comprehensive Income, in the consolidated Statements of Changes in Shareholders' Equity. The subtotal Comprehensive income represents total comprehensive income as defined in the statement. Reclassification adjustments, related tax effects allocated to changes in equity, and accumulated other comprehensive income as of and for the years ended December 31 were as follows:

(in thousands)	2006		2005			2004
Reclassification adjustment, pretax:
Change in unrealized net gains (losses) arising during year	$	1,654	$	(8,276	)	$	(5,203	)
Reclassification adjustment for net gains included in net income		0		(3	)		(639	)
Change in unrealized gains on securities available-for-sale		1,654		(8,279	)		(5,842	)
Related tax effects:
Change in unrealized net gains (losses) arising during year		579		(2,897	)		(1,821	)
Reclassification adjustment for net gains included in net income		0		(1	)		(224	)
Change in net deferred tax liability		579		(2,898	)		(2,045	)
Reclassification adjustment, net of tax:
Change in unrealized net gains (losses) arising during year		1,075		(5,379	)		(3,382	)
Reclassification adjustment for net gains included in net income		0		(2	)		(415	)
Change in other comprehensive income	$	1,075	$	(5,381	)	$	(3,797	)

24. FDIC One-Time Assessment Credit

Effective November 17, 2006, the FDIC implemented a one-time credit of $4.7 billion to eligible institutions. The purpose of the credit is to recognize contributions made by certain institutions to capitalize the Bank Insurance Fund and Savings Association Insurance Fund, which have now been merged into the Deposit Insurance Fund. The Bank is an eligible institution and has received notice from the FDIC that its share of the credit is approximately $2.2 million. This amount is not reflected in the accompanying financial statements as it represents contingent future credits against future insurance assessment payments. As such, the timing and ultimate recoverability of the one-time credit may change.

63

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders

Community Trust Bancorp, Inc.

Pikeville, Kentucky

We have audited the accompanying consolidated balance sheet of Community Trust Bancorp, Inc. (Company) as of December 31, 2006, and the related consolidated statement of income, changes in shareholders’ equity and cash flows for the year then ended. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2006, and the results of its operations and its cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the effectiveness of the Company’s internal control over financial reporting as of December 31, 2006, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) and our report dated March 9, 2007, expressed unqualified opinions on management’s assessment and on the effectiveness of the Company’s internal control over financial reporting.

/s/ BKD, LLP

BKD, LLP

Louisville, Kentucky

March 9, 2007

64

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders

Community Trust Bancorp, Inc.

Pikeville, Kentucky

We have audited management’s assessment, included in the accompanying Management Report on Internal Control, that Community Trust Bancorp, Inc. (Company) maintained effective internal control over financial reporting as of December 31, 2006, based on criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting. Our responsibility is to express an opinion on management’s assessment and an opinion on the effectiveness of the Company’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. An audit includes obtaining an understanding of internal control over financial reporting, evaluating management’s assessment, testing and evaluating the design and operating effectiveness of internal control and performing such other procedures as we consider necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company, (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, management’s assessment that the Company maintained effective internal control over financial reporting as of December 31, 2006, is fairly stated, in all material respects, based on criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Also, in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2006, based on criteria established in COSO.

65

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated financial statements of the Company and our report dated March 9, 2007, expressed an unqualified opinion thereon.

/s/ BKD, LLP

BKD, LLP

Louisville, Kentucky

March 9, 2007

66

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders

Community Trust Bancorp, Inc.

Pikeville, Kentucky

We have audited the accompanying consolidated statement of financial condition of Community Trust Bancorp, Inc. and its subsidiaries (the “Corporation”) as of December 31, 2005, and the related consolidated statements of income, stockholders' equity, and cash flows for the years ended December 31, 2005 and 2004. These consolidated financial statements are the responsibility of the Corporation’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of Community Trust Bancorp, Inc. and its subsidiaries as of December 31, 2005, and the results of their operations and their cash flows for the years ended December 31, 2005 and 2004, in conformity with accounting principles generally accepted in the United States of America.

/s/ Deloitte & Touche LLP

Deloitte & Touche LLP

Louisville, Kentucky

March 9, 2006

67

Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure

The Audit Committee of Community Trust Bancorp, Inc. announced on May 15, 2006 that it engaged BKD, LLP to serve as the Corporation's new independent registered certified public accountants. Deloitte & Touche LLP (“Deloitte”) resigned as the Corporation's independent registered public accounting firm. The Audit Committee accepted Deloitte’s resignation.

The reports of Deloitte on our consolidated financial statements for the fiscal years ended December 31, 2005 and 2004 did not contain an adverse opinion or a disclaimer of opinion and were not qualified or modified as to uncertainty, audit scope, or accounting principle.

Item 9A. Controls and Procedures

The Corporation's management is responsible for establishing and maintaining effective disclosure controls and procedures, as defined under Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934. As of December 31, 2006, an evaluation was performed under the supervision and with the participation of management, including the Chief Executive Officer and the Executive Vice President/Treasurer, of the effectiveness of the design and operation of the Corporation's disclosure controls and procedures. Based on that evaluation, management concluded that disclosure controls and procedures as of December 31, 2006 were effective in ensuring material information required to be disclosed in this annual report on Form 10-K was recorded, processed, summarized, and reported on a timely basis. Additionally, there were no changes in the Corporation's internal control over financial reporting that occurred during the year ended December 31, 2006 that have materially affected, or are reasonably likely to materially affect, the Corporation's internal control over financial reporting.

Management's responsibilities related to establishing and maintaining effective disclosure controls and procedures include maintaining effective internal controls over financial reporting that are designed to produce reliable financial statements in accordance with accounting principles generally accepted in the United States. There have been no significant changes in the Corporation's internal controls or in other factors that could significantly affect internal controls subsequent to December 31, 2006.

68

MANAGEMENT REPORT ON INTERNAL CONTROL

We, as management of Community Trust Bancorp, Inc. and its subsidiaries (“the Corporation”), are responsible for establishing and maintaining adequate internal control over financial reporting. Pursuant to the rules and regulations of the Securities and Exchange Commission, internal control over financial reporting is a process designed by, or under the supervision of, the company’s principal executive and principal financial officers, or persons performing similar functions, and effected by the company’s board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that:

·   Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the company;

·   Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and

·   Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the company’s assets that could have a material effect on the financial statements.

All internal control systems, no matter how well designed, have inherent limitations, including the possibility of human error and the circumvention of overriding controls. Accordingly, even effective internal control can provide only reasonable assurance with respect to financial statement preparation. Further, because of changes in conditions, the effectiveness of internal control may vary over time.

Because of the inherent limitations, any system of internal control over financial reporting, no matter how well designed, may not prevent or detect misstatements due to the possibility that a control can be circumvented or overridden or that misstatements due to error or fraud may occur that are not detected. Also, projections of the effectiveness to future periods are subject to the risk that the internal controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies and procedures included in such controls may deteriorate.

Management has evaluated the effectiveness of its internal control over financial reporting as of December 31, 2006 based on the control criteria established in a report entitled Internal Control—Integrated Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on such evaluation, we have concluded that the Corporation’s internal control over financial reporting is effective as of December 31, 2006.

The registered independent public accounting firm of BKD, LLP, as auditor of the Corporation’s consolidated financial statements, has issued an attestation report on management’s assessment of the Corporation’s internal control over financial reporting.

Date:  March 9, 2007	By:	/s/ Jean R. Hale
		Chairman, President and Chief Executive Officer

By:	/s/ Kevin J. Stumbo
	Executive Vice President and Treasurer   (Principal Financial Officer)

69

Item 9B. Other Information

None

PART III

Items 10 and 11. Directors and Executive Officers of the Registrant and Executive Compensation

The information required by these Items other than the information set forth above under Part I, "Executive Officers of the Registrant," is omitted because the Corporation is filing a definitive proxy statement pursuant to Regulation 14A not later than 120 days after the end of the fiscal year covered by this report which includes the required information. The required information contained in the Corporation’s proxy statement is incorporated herein by reference.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters

The information required by this Item other than the information provided below is omitted because the Corporation is filing a definitive proxy statement pursuant to Regulation 14A not later than 120 days after the end of the fiscal year covered by this report which includes the required information. The required information contained in the Corporation’s proxy statement is incorporated herein by reference.

Equity Compensation Plan Information

The following table provides information as of December 31, 2006, with respect to compensation plans under which common shares of the Corporation are authorized for issuance to officers or employees in exchange for consideration in the form of services provided to the Corporation and/or its subsidiaries. We currently maintain one active and two inactive incentive stock option plans covering key employees. The 2006 Stock Option Plan ("2006 Plan") was approved by the Board of Directors and the Shareholders in 2006. The 2006 Plan had 1,500,000 shares authorized all of which were available at December 31, 2006 for future grants. In addition, any shares reserved for issuance under the 1998 Stock Option Plan ("1998 Plan") in excess of the number of shares as to which options or other benefits are awarded thereunder, plus any shares as to which options or other benefits granted under the 1998 Plan may lapse, expire, terminate or be canceled, shall also be reserved and available for issuance or reissuance under the 2006 Plan. The 1998 Plan was approved by the Board of Directors and the Shareholders in 1998. The 1998 Plan had 1,046,831 shares authorized, 145,577 of which were available at December 31, 2006 for future grants. The 1989 Stock Option Plan ("1989 Plan") was approved by the Board of Directors and the Shareholders in 1989. The 1989 Stock Option Plan ("1989 Plan") has no remaining options available for grant.

70

	A	B	C
Plan Category	Number of Common Shares to be Issued Upon Exercise of Outstanding Options	Weighted Average Exercise Price of Issuance Outstanding Options	Number of Securities Available for Future Issuance Under Equity Compensation Plans (excluding securities reflected in Column A)
Equity compensation plans approved by shareholders	637,696	$23.41	1,645,577
Equity compensation plans not approved by shareholders	0	--	0
Total	637,696	$23.41	1,645,577

Additional information regarding the Corporation’s stock option plans can be found in notes 1 and 14 to the consolidated financial statements.

Item 13. Certain Relationships and Related Transactions

The information required by this Item is omitted because the Corporation is filing a definitive proxy statement pursuant to Regulation 14A not later than 120 days after the end of the fiscal year covered by this report which includes the required information. The required information contained in the Corporation’s proxy statement is incorporated herein by reference.

Item 14. Principal Accountant Fees and Services

The information required by this Item is omitted because the Corporation is filing a definitive proxy statement pursuant to Regulation 14A not later than 120 days after the end of the fiscal year covered by this report which includes the required information. The required information contained in the Corporation’s proxy statement is incorporated herein by reference.

71

PART IV

Item 15. Exhibits and Financial Statement Schedules

(a) The following documents are filed as a part of this report:

Financial Statements and Financial Statement Schedules

Exhibit No.	Description of Exhibits
3.1	Articles of Incorporation and all amendments thereto (incorporated by reference to registration statement no. 33-35138)
3.2	By-laws of the Corporation, as amended July 25, 1995 (incorporated by reference to registration statement no. 33-61891)
10.1	Community Trust Bancorp, Inc. Employee Stock Ownership Plan (Effective January 1, 2007)
10.2	Community Trust Bancorp, Inc. Savings and Employee Stock Ownership Plan (Amendment Number One effective January 1, 2002, Amendment Number Two effective January 1, 2004, Amendment Number Three effective March 28, 2005, and Amendment Number Four effective January 1, 2006)
10.3	Second restated Pikeville National Corporation 1989 Stock Option Plan (commonly known as Community Trust Bancorp, Inc. 1989 Stock Option Plan) (incorporated by reference to registration statement no. 33-36165)
10.4	Community Trust Bancorp, Inc. 1998 Stock Option Plan (incorporated by reference to registration statement no. 333-74217)
10.5	Community Trust Bancorp, Inc. 2006 Stock Option Plan (incorporated by reference to registration statement no. 333-74217)
10.6	Form of Severance Agreement between Community Trust Bancorp, Inc. and executive officers (currently in effect with respect to eleven executive officers) (incorporated herein by reference to Form 10-K for the fiscal year ended December 31, 2001 under SEC file no. 000-111-29)
10.7	Senior Management Incentive Compensation Plan (2007)
21	List of subsidiaries
23.1	Consent of BKD, LLP, Independent Registered Public Accounting Firm
23.2	Consent of Deloitte & Touche LLP, Independent Registered Public Accounting Firm
31.1	Certification of Principal Executive Officer (Jean R. Hale, Chairman, President and CEO)
31.2	Certification of Principal Financial Officer (Kevin J. Stumbo, Executive Vice President and Treasurer)
32.1	Certification of Jean R. Hale, Chairman, President and CEO, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2	Certification of Kevin J. Stumbo, Executive Vice President and Treasurer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the arbanes-Oxley Act of 2002

(b)Exhibits

The response to this portion of Item 15 is submitted as a separate section of this report.

(c)Financial Statement Schedules

None

72

SIGNATURES

Pursuant to the requirements of Section 13 or 15 (d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf the undersigned, thereunto duly authorized.

	COMMUNITY TRUST BANCORP, INC.
Date:  March 14, 2007	By:	/s/ Jean R. Hale
		Chairman, President and Chief Executive Officer

By:	/s/ Kevin J. Stumbo
	Executive Vice President and Treasurer   (Principal Financial Officer)

73

Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the date indicated.

March 14, 2007	/s/ Jean R. Hale	Chairman, President, and Chief Executive Officer
	Jean R. Hale
March 14, 2007	/s/ Kevin J. Stumbo	Executive Vice President and Treasurer (Principal Financial Officer)
	Kevin J. Stumbo
March 14, 2007	/s/ Charles J. Baird	Director
	Charles J. Baird
March 14, 2007	/s/ Nick A. Cooley	Director
	Nick A. Cooley
March 14, 2007	/s/ James E. McGhee, II	Director
	James E. McGhee II
March 14, 2007	/s/ M. Lynn Parrish	Director
	M. Lynn Parrish
March 14, 2007	/s/ James R. Ramsey	Director
	James R. Ramsey
March 14, 2007	/s/ Paul E. Patton	Director
	Paul E. Patton

74

COMMUNITY TRUST BANCORP, INC. AND SUBSIDIARIES

INDEX TO EXHIBITS

Exhibit No.	Description of Exhibits
3.1	Articles of Incorporation and all amendments thereto (incorporated herein by reference)
3.2	By-laws of the Corporation, as amended July 25, 1995 (incorporated herein by reference)
10.1	Community Trust Bancorp, Inc. Employee Stock Ownership Plan (Effective January 1, 2007)
10.2	Community Trust Bancorp, Inc. Savings and Employee Stock Ownership Plan (Amendment Number One effective January 1, 2002, Amendment Number Two effective January 1, 2004, Amendment Number Three effective March 28, 2005, and Amendment Number Four effective January 1, 2006)
10.3	Second restated Pikeville National Corporation 1989 Stock Option Plan (commonly known as Community Trust Bancorp, Inc. 1989 Stock Option Plan) (incorporated herein by reference)
10.4	Community Trust Bancorp, Inc. 1998 Stock Option Plan (incorporated herein by reference)
10.5	Community Trust Bancorp, Inc. 2006 Stock Option Plan (incorporated herein by reference)
10.6	Form of Severance Agreement between Community Trust Bancorp, Inc. and executive officers (currently in effect with respect to eleven executive officers) (incorporated herein by reference)
10.7	Senior Management Incentive Compensation Plan (2007)
21	List of subsidiaries
23.1	Consent of BKD, LLP, Independent Registered Public Accounting Firm
23.2	Consent of Deloitte & Touche LLP, Independent Registered Public Accounting Firm
31.1	Certification of Principal Executive Officer (Jean R. Hale, Chairman, President and CEO)
31.2	Certification of Principal Financial Officer (Kevin J. Stumbo, Executive Vice President and Treasurer)
32.1	Certification of Jean R. Hale, Chairman, President and CEO, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2	Certification of Kevin J. Stumbo, Executive Vice President and Treasurer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

75

EX-10.1

EXHIBIT 10.1

COMMUNITY TRUST BANCORP, INC.

EMPLOYEE STOCK OWNERSHIP PLAN

Effective January 1, 2007

Community Trust Bancorp, Inc. hereby creates an employee stock ownership plan, effective as of January 1, 2007, for the benefit of its eligible employees in accordance with the following terms and conditions.

ARTICLE I

PURPOSE OF PLAN

The purpose of the Plan is to provide tax-deferred employer contributions to eligible employees of the Company and its Affiliates and their beneficiaries. In order to provide such benefits, the Company has established a trust in accordance with the requirements of law to which the Company will make contributions on behalf of eligible employees. Such contributions, and any income derived therefrom, shall be held for the exclusive benefit of participating employees and their beneficiaries and shall not be used for, or diverted to, any other purpose.

This Plan is intended to satisfy the requirements of Section 4975(e)(7) of the Code as an employee stock ownership plan.

ARTICLE II

DEFINITIONS

As used in the Plan:

2.1“Affiliate” means for any Plan Year a corporation that for any part of such year is a member of a controlled group of corporations (as defined in Section 1563(a) of the Code, disregarding Sections 1563(a)(4) and 1563(e)(3)(c)) of which the Company is a member, any trade or business, whether incorporated or not, that for any part of such year is considered to be under common control with the Company under regulations prescribed by the Secretary of the Treasury pursuant to Section 414(c) of the Code, and any organization that for any part of such year is considered under regulations prescribed by the Secretary of the Treasury pursuant to Section 414(m) of the Code to be a member of an affiliated service group of which the Company is a member.

2.2“Beneficiary” means any person or persons entitled to receive a benefit under the Plan which is payable upon or after a Participant’s death.

2.3“Board” means the Board of Directors of the Company.

2.4“Break in Service” means a Plan Year during which an Employee is credited with not more than five hundred (500) Hours of Service, but shall not include a Leave of Absence.

2.5“Code” means the Internal Revenue Code of 1986, as amended.

2.6“Committee” means the Community Trust Bancorp, Inc. Retirement and Benefits Committee appointed by the Board to administer the Plan.

2.7“Company” means Community Trust Bancorp Inc. and any corporate successor thereto. The Company shall be the plan sponsor.

2.8“Company Stock” means shares of voting common stock issued by the Company, or by a corporation that is a member of the same controlled group within the meaning of Section 409(1)(4) of the Code, that constitute “employer securities” under Section 409(l) of the Code and Treasury Regulation Section 54.4975-12.

2.9“Compensation” means the aggregate of all payment for services paid by the Employer to a Participant during a Plan Year subsequent to the Participant’s Entry Date, including base pay, overtime, bonuses, one-time payments, incentive compensation, commissions and absence pay including payments for sick, personal, vacation, bereavement, jury duty, disability and work related training; provided, Compensation shall exclude any reimbursed personal automobile expenses, car allowances or car add-ins, relocation expenses, excess life insurance premiums under Section 79 of the Code, stock based compensation includible in a Participant’s gross income and any severance payments or amounts paid upon the cancellation of an employment contract. Compensation shall be determined without regard to any reduction in remuneration resulting from an election to have any salary deferral contributions made to any plan or for any other elective amounts that are not includible in the gross income of a Participant under Section 125 or 132(f)(4) of the Code. For purposes of the Plan, in no event shall a Participant’s Compensation be taken into account to the extent such Compensation exceeds $225,000, as adjusted by the Secretary of Treasury for cost of living increases.

2.10“Covered Employee” means any Employee of the Employer except any Employee (a) who is included in a collective bargaining unit unless participation in the Plan by any such Employee was agreed to in the process of good faith negotiations between the Company and the collective bargaining unit’s representative; (b) who is employed by a business acquired on or after January 1, 1999 by the Employer except as provided by a resolution adopted by the Committee following the acquisition; (c) who is a leased employee of the Employer; (d) who is excluded from participating in the Plan on the basis of payroll classification as not being an employee, but is subsequently reclassified by a judicial, regulatory or administrative action as a common-law employee of the recipient organization; or (e) an Employee who is a nonresident alien and who receives no earned income (within the meaning of Section 911(d)(2) of the Code) from the Company or an Affiliate which constitutes income from services within the United States (within the meaning of Section 861(a)(3) of the Code).

2.11“Direct Rollover” means a payment by the Plan of all or any portion of an Eligible Rollover Distribution to an Eligible Retirement Plan designated by a Distributee.

2.12“Distributee” means any Participant, Former Participant, surviving spouse of any Participant or of any Former Participant, and any alternate payee under a qualified domestic relations order within the meaning of Section 414(p) of the Code who receives an Eligible Rollover Distribution.

2.13“Eligibility Computation Period” means a twelve (12) consecutive month period beginning on the Employment Commencement Date; provided, if an Employee does not earn one thousand (1,000) Hours of Service during such twelve month period then, thereafter the Eligibility Computation Period shall be a Plan Year commencing with the first Plan Year after an Employee’s Employment Commencement Date.

2.14“Eligible Employee” means an Employee who meets the requirements of Section 3.1 or 3.2 of the Plan.

2.15“Eligible Retirement Plan” means, if the Distributee is not the surviving spouse of a Participant or of a Former Participant, any of the following:

(a)an individual retirement account described in Section 408(a) of the Code;

(b)an individual retirement annuity described in Section 408(b) of the Code;

(c)an annuity plan described in Section 403(a) of the Code; or

(d)a qualified plan described in Section 401(a) of the Code.

  The term Eligible Retirement Plan also shall include an eligible deferred compensation plan described in Section 457(b) of the Code which is maintained by an eligible employer described in Section 457(e)(1)(A) and an annuity contract described in Section 403(b) of the Code.

2.16“Eligible Rollover Distribution” means any distribution of all or a portion of the balance to the credit of a Distributee, except that such term shall not include:

(a)any distribution that is one of a series of substantially equal periodic payments made (not less frequently than annually) for either:

(i)the life (or life expectancy) of the Distributee or the joint lives (or joint life expectancies) of the Distributee and the Distributee’s designated Beneficiary, or

(ii)a specified period of ten years or more;

(b)any distribution to the extent such distribution is required under Section 401(a)(9) of the Code;

(c)any distribution or portion of a distribution that is not includible in the gross income of the Distributee;

(d)any withdrawal on account of financial hardship; or

(e)any other type of distribution or similar item designated by the Internal Revenue Service as exempt from the definition of Eligible Rollover Distribution.

2.17“Employee” means any individual who is compensated by the Employer or by an Affiliate for services actually rendered as a common law employee.

2.18“Employer” means for any Plan Year the Company and each Affiliate that is listed (with the approval of the Committee) on Schedule A that has not terminated its participation in the Plan during or prior to such Plan Year; provided, that absent the express consent of the Board, the participation of an Affiliate shall terminate automatically on the date the Company’s ownership or proprietary interest in or affiliation with such Affiliate terminates. The term Employer shall include each successor corporation of an Affiliate listed on Schedule A.

2.19“Employer Base Contribution” or “Employer Contribution” means a contribution made by the Employer to the Trust under the Plan pursuant to Article IV.

2.20“Employer Base Contribution Account” means the separate account maintained for a Participant that contains Employer Base Contributions made by the Employer.

2.21“Employment Commencement Date” means the first date on which an Employee is entitled to be credited with an Hour of Service.

2.22“Entry Date” means January 1, April 1, July 1 or October 1.

2.23“ERISA” means the Employee Retirement Income Security Act of 1974, as amended, or any successor statute.

2.24“ESOP Stock Fund” means the Investment Fund maintained for a Participant that contains the assets held in such Participant’s Plan Account that reflect such Participant’s interest in Company Stock held by the Trust attributable to Employer Base Contributions.

2.25“Former Participant” means a Participant whose employment with the Employer has terminated but who has a vested balance in his Plan Account.

2.26“Highly Compensated Employee” means any Employee who performs service for the Employer during the Determination Year and who, during the Look-back Year: (i) was a five percent (5%) owner at any time during such year, or (ii) received compensation from the Employer in excess of $100,000 (as adjusted by the Secretary of Treasury for cost of living increases). The term Highly Compensated Employee also includes Employees who are five-percent (5%) owners at any time during the Determination Year. For purposes of this Section 2.26, the Determination Year shall be the Plan Year and the Look-back Year shall be the twelve (12) month period immediately preceding the Determination Year. For purposes of this Section 2.26, compensation means compensation as defined under Section 415(c)(3) of the Code paid to the Employee by the Employer including any salary reduction contributions under any other plan of the Employer and any other elective amounts that are not includible in the gross income of a Participant under Section 132(f)(4) of the Code. The determination of who is a Highly Compensated Employee will be made in accordance with section 414(q) of the Code and the regulations thereunder.

2.27“Hour of Service” shall be determined from records maintained by the Employer.

(a)Inclusions.

An Hour of Service shall include:

(i)Each hour for which an Employee is directly or indirectly paid or entitled to payment by the Employer for the performance of duties. Each such Hour of Service shall be credited to the Eligibility Computation Period or calendar year in which the duties were actually performed. Notwithstanding the foregoing, an Employee who does not have a regular working schedule shall be credited with 45 hours per week for each week in which such Employee is credited with at least one hour.

(ii)Each hour for which back pay (irrespective of mitigation of damages) has been either awarded or agreed to by the Employer. Each such Hour of Service shall be credited to the Eligibility Computation Period or calendar year to which the agreement or award with respect to back pay pertains rather than to the Eligibility Computation Period or calendar year in which the award, agreement or payment is made.

(iii)Each hour for which an Employee is directly or indirectly paid, or entitled to payment, by the Employer for reasons other than the performance of duties during a period of service with the Employer in which no duties are performed (irrespective of whether the employment relationship has terminated) because of vacation, holiday, sickness, incapacity, disability, layoff, jury duty, military duty or compensated Leave of Absence. Each such Hour of Service shall be credited in accordance with paragraphs (b) and (c) of Section 2530.200b-2 of the Hour of Service regulations of the Department of Labor.

(iv)Each hour during which an Employee normally would have been entitled to credit for the performance of duties with the Employer but during which no duties are performed by reason of the absence of an Employee due to the pregnancy of the Employee, the birth of a child of the Employee, the placement of a child with the Employee in connection with the adoption of such child by the Employee or the caring for a child for a period beginning immediately following such birth or placement. For the purpose of this Section 2.27(a)(iv), an Employee who does not have a regular working schedule shall be deemed to have a regular working schedule of 40 hours per week and 8 hours per day. Each such Hour of Service shall be credited to the Eligibility Computation Period in which such absence begins if the crediting of such Hours of Service to the Employee in such Eligibility Computation Period would prevent the Employee from incurring a Break-in-Service during such Eligibility Computation Period or, otherwise, to the immediately following Eligibility Computation Period, but only to the extent necessary to prevent the Employee from incurring a Break-in-Service in such immediately following Eligibility Computation Period. No credit for hours shall be provided according to this Section 2.27(a)(iv) unless the Employee furnishes to the Plan Administrator information that provides the reason for the absence and the number of days for which there was such an absence.

(b)Exclusions.

Notwithstanding the foregoing, an Hour of Service shall not include:

(i)any Hours of Service, credited during a period in which no duties are performed by an Employee, which exceed the number of hours regularly scheduled for performance of duties during such period;

(ii)more than five hundred and one (501) Hours of Service credited to a single continuous period during which an Employee does not perform any duties (whether or not such period occurs during a single Eligibility Computation Period or calendar year);

(iii)any hour for which an Employee is directly or indirectly paid, or entitled to payment, if such payment is made or due solely to reimburse the Employee for medical or medically related expenses incurred by the Employee; or

(iv)any hour for which an Employee is directly or indirectly paid, or entitled to payment, during a period in which the Employee performs no duties, if such payment is made or due under a plan maintained solely for the purpose of complying with applicable workmen’s compensation, unemployment compensation or disability insurance laws.

(c)Crediting Hours of Service.

An Employee shall not be credited with an Hour of Service under this Section more than once. All Hours of Service attributable to a period of no more than thirty-one (31) days that overlap two (2) Eligibility Computation Periods or calendar years shall be credited either to the first or to the second of the two such periods or years involved as the Committee, in its discretion, may determine on any reasonable basis which is consistently applied with respect to all Employees.

2.28“Leave of Absence” means a leave of absence granted in writing to an Employee in accordance with the personnel policy of the Employer by which such Employee is employed during which he or she is not expected to perform an Hour of Service. The employment of an Employee who is on a Leave of Absence shall terminate for purposes of this Plan on the earlier of (a) the date on which such Leave of Absence expires, if the Leave of Absence is for a fixed period or expires upon the occurrence of a certain event, such as recovery from a disability, unless the Employee immediately upon the expiration of the Leave of Absence returns to the employment of the Employer, (b) the first anniversary of the date on which such Leave of Absence commenced, if such Leave of Absence was for an indefinite period, or (c) the date on which the Employee dies, retires, or Terminates Employment as an Employee.

2.29“Normal Retirement Date” means the first day of the month coincident with or next following a Participant’s sixty-fifth (65th) birthday.

2.30“Participant” means an Eligible Employee who has been allocated employer contributions to his or her Plan Account in the manner provided in Article IV.

2.31“Plan” means the Community Trust Bancorp, Inc. Employee Stock Ownership Plan as set forth in this document and as hereafter amended.

2.32“Plan Account” means a Participant’s Employer Base Contribution Account.

2.33“Plan Administrator” means the Company or such other person(s) as may be designated by the Company pursuant to Article XVI.

2.34“Plan Year” means the calendar year.

2.35“Qualified Domestic Relations Order” means a judgment, decree or order (including an approval of a property settlement agreement) that relates to the provision of child support, alimony payments or marital property rights to a spouse, former spouse, child or other dependent of a Participant or Former Participant, that is made pursuant to a domestic relations law of a state, that meets the requirements of Section 414(p) of the Code and that creates or recognizes the right of an alternate payee to receive all or a portion of the benefit payable to a Participant or Former Participant.

2.36“Qualified Election Period” means the six consecutive Plan Years beginning with the first Plan Year in which the Participant first becomes a Qualified Participant.

2.37“Qualified Participant” means a Participant who has attained age 55 and who has completed at least ten years of participation under the Plan.

2.38“Rehired Employee” means an Employee who Terminates Employment and subsequently is reemployed by the Employer.

2.39“Termination of Employment”, including the verb form “Terminates Employment”, means the voluntary or involuntary termination of employment with the Employer for any reason other than death or retirement.

2.40“Total and Permanent Disability” means the Participant has become entitled to receive disability benefits either under a long term disability plan sponsored by the Company or one of its Affiliates or under the United States Social Security Act.

2.41“Trust” means the legal entity created by the Trust Agreement between the Company and the Trustee under which the Trustee shall receive the total contributions made by the Employer pursuant to the Plan and shall hold, invest and disburse the Trust Fund to, or for the benefit of, Participants and their Beneficiaries under the Plan.

2.42“Trust Agreement” means the Community Trust Bancorp, Inc. Employee Stock Ownership Plan Trust Agreement.

2.43“Trust Fund” means the total contributions made by the Employer pursuant to this Plan, increased by profits, gains, income and recoveries received, and decreased by losses, depreciation, benefits paid and expenses incurred but not paid by the Employer in the administration of the Trust Fund. The term “Trust Fund” shall include all assets acquired by investment and reinvestment that are held in the Trust by the Trustee.

2.44“Trustee” means the parties, individual or corporate, named as Trustee in the Trust Agreement or any successor thereto.

2.45“Valuation Date” means any day, but not less frequently than once during each Plan Year, on which the balances in the Plan Accounts are valued under procedures established by the Committee, in the exercise of its sole discretion.

2.46“Year of Eligibility Service” means an Eligibility Computation Period in which an Employee is credited with one thousand (1,000) or more Hours of Service with the Employer or an Affiliate.

2.47“Year of Vesting Service” means a Plan Year in which an Employee is credited with one thousand (1,000) or more Hours of Service with the Employer or an Affiliate.

ARTICLE III

ELIGIBILITY AND PARTICIPATION

3.1General Rule.

Each Covered Employee who has attained age twenty-one (21) and who is credited with one (1) Year of Eligibility Service under the Plan shall be an Eligible Employee and may commence participation on the Entry Date coincident with, or next following, the date on which he or she satisfies such requirement, or any Entry Date thereafter, provided he or she is a Covered Employee on the Entry Date, or if not a Covered Employee on such date, on the first Entry Date after the date thereafter on which he or she is a Covered Employee. Notwithstanding any provisions of the Plan to the contrary, an Employee who receives prior service credit pursuant to Article XXIV and who satisfies the eligibility requirements of this Section 3.1 based on his or her prior employment shall commence participation as of the Entry Date next following his or her employment date. Notwithstanding any provisions of this Section 3.1 to the contrary, any Covered Employee who was a participant in the Community Trust Bancorp, Inc. Savings and Employee Stock Ownership Plan on December 31, 2006 shall be deemed an eligible Participant for purposes of this Plan on January 1, 2007.

3.2Re-employment, Breaks of Service and Leaves of Absence.

A Former Participant who returns to employment and becomes a Covered Employee may commence participation as of the date he or she again becomes a Covered Employee. An Employee who has satisfied the eligibility requirements of this Article III but does not become a Participant on the next Entry Date due to a Break in Service, a Leave of Absence or because he or she is not a Covered Employee on that Entry Date may commence participation upon the Entry Date next following the termination of the Break in Service or Leave of Absence or the date he or she again becomes a Covered Employee. An Employee who has satisfied the eligibility requirements of this Article III but who Terminates Employment prior to his or her applicable Entry Date, and who is re-employed after that Entry Date, shall commence participation immediately upon reemployment. Notwithstanding any other provisions herein to the contrary, any Former Participant or terminated Employee who subsequently returns to employment after a Break in Service shall be required to complete 1,000 Hours of Service in the twelve (12) consecutive months beginning on his or her date of reemployment, or, failing that, in any Plan Year that commences after his or her date of reemployment. Upon completion of 1,000 Hours of Service, the Plan participation for such Former Participant or Employee (except with regard to entitlement to contributions under the Plan) shall be retroactive to his or her date of reemployment.

3.3Notice of Eligibility.

The Employer shall notify each Employee of his or her status as an Eligible Employee and right to participate in the Plan. Any Employee who was a participant in the Community Trust Bancorp, Inc. Savings and Employee Stock Ownership Plan as of December 31, 2006, shall be deemed to have received such notice.

ARTICLE IV

EMPLOYER CONTRIBUTIONS

With respect to each Plan Year, the Employer shall contribute to the Employer Base Contribution Account on behalf of each Participant an amount not less than three percent (3%) of the Compensation of such Participant. The Employer Base Contribution may be made in cash or in shares of Company Stock as determined solely by the Employer. The Employer Base Contribution shall be allocated not later than the last day of each calendar quarter within a Plan Year to the ESOP Stock Fund of each Participant.

ARTICLE V

ACCOUNTS AND CONTRIBUTIONS

5.1Plan Accounts

The Trustee shall establish and maintain in the name of each Participant an Employer Base Contribution Account, as appropriate. However, no account need be maintained with respect to a Participant if no assets would be allocated to that account.

5.2Contributions to Trust

All contributions to the Trust shall be paid directly to the Trustee. Each contribution shall be subject to instructions from the Plan Administrator that identify each Participant on whose behalf the contribution is being made and the amount thereof.

5.3Return of Contributions

(a)Qualification of Plan

The retention by the Trustee of contributions made to the Trust shall be specifically conditioned upon the continued qualification of the Plan under Section 401 of the Internal Revenue Code. If the Plan does not so qualify, any contributions made by the Employer to the Trust shall be returned to the Employer as soon as practicable but within one year after the date of denial of qualification of the Plan.

(b)Deductibility of Contributions

The retention by the Trustee of contributions made to the Trust Fund shall be conditioned upon the deductibility of such contributions under Section 404 of the Code. To the extent such deduction is disallowed, any contribution to the Trust shall be returned to the Employer or to the Participant, respectively, as soon as practicable but within one year after the disallowance of the deduction.

(c)Mistake of Fact

Any contribution made to the Plan because of a mistake of fact may be returned to the Employer, at the discretion of the Employer, as soon as practicable but within one year after the payment of such contribution.

ARTICLE VI

GENERAL LIMITS

6.1Limitations on Contributions

Notwithstanding any other provision of the Plan to the contrary, the contributions to a Participant’s Plan Account under this Plan and any other defined contribution plans maintained by the Employer (or by any trade or business, whether or not incorporated, which is considered to be under common control with the Employer under regulations prescribed by the Secretary of the Treasury pursuant to Section 414(c) of the Code), with respect to a Plan Year, which shall be the “limitation year,” shall not exceed the lesser of (a) Forty-five Thousand Dollars ($45,000), as adjusted for increases in the cost of living under Code Section 415(d), or one-hundred percent (100%) of the Participant’s total compensation. Compensation, for purposes of this Article shall mean all compensation paid to a Participant as an Employee during the Plan Year for personal services rendered in the course of employment within the meaning of Section 415(c)(3) of the Code, including any elective deferrals (as defined in Section 402(g)(3) of the Code), and any amounts that are contributed or deferred by the Employer at the election of the Participant and which is not includible in the gross income of the Participant by reason of Section 125, Section 132(f) or Section 457 of the Code.

6.2Excess Contributions

In the event that it is determined that the Employer Contributions to a Participant’s Plan Account with respect to a Plan Year exceed the limitations contained in Section 6.1, the Employer may take any permissible action to bring such Employer Contributions within the allowable limitations, including, but not limited to, holding any “excess amounts” in a Code Section 415 suspense account, allocating and reallocating the Code Section 415 suspense account in the next limitation year (and succeeding limitation years, if necessary) to all Participants in the Plan before any Employer Contributions which would constitute annual additions are made to the Plan for such limitation year and reducing Employer Contributions to the Plan for such “limitation year” by the amount of the Code Section 415 suspense account allocated and reallocated during such limitation year. For purposes of this section, a Code Section 415 suspense account shall mean an unallocated account equal to the sum of excess amounts for all Participants in the Plan during the limitation year.

ARTICLE VII

VESTING

7.1Vesting Schedule

A Participant’s interest in his or her Employer Base Contribution Account shall be 100% vested in the event (a) he or she attains age 65 while still employed by the Employer or (b) his or her employment terminates as a result of death or Total and Permanent Disability. If a Participant’s employment terminates prior to attaining age 65 for any reason other than death or Total and Permanent Disability, then the Vested Percentage of the Plan Account shall be calculated in accordance with the following table:

Years of Vesting ServiceVested Percentage

Fewer than 30%

3 or more100%

7.2Calculation of Years of Vesting Service

(a)Any Year of Vesting Service completed after a Break in Service shall not be included for the purpose of determining a Participant’s vested percentage with respect to Employer Contributions to the Plan Account prior to the Break in Service if the number of consecutive Breaks in Service equals or exceeds five.

(b)If a Participant’s interests in his or her Plan Account are 100% forfeitable at the time the Participant has a Break in Service, any Year of Vesting Service completed before such Break in Service shall not be counted if the number of consecutive Breaks in Service equals or exceeds five. The aggregate number of Years of Vesting Service before a Break in Service shall not include any Years of Vesting Service not required to be taken into account under this subsection by reason of any prior Break in Service.

7.3Use of Forfeitures

Forfeitures from a Participant’s Employer Base Contribution Account, shall be allocated among the Plan Accounts of remaining Participants in accordance with the provisions of this Section 7.3. Available forfeitures shall be allocated as of any Valuation Date selected by the Committee, in its sole discretion, so long as such an allocation of available forfeitures is made at least once per each Plan Year. Forfeitures shall be allocated to the Employer Base Contribution Accounts of all Participants who are entitled to an allocation of Employer Base Contributions with respect to the Valuation Date for which such forfeitures are being allocated, and each such Participant’s allocable share of the forfeiture amount shall be determined on the same ratio that such Participant’s Compensation for such Plan Year that includes the Valuation Date bears to the Compensation of all Participants for such Plan Year.

7.4Forfeiture of Unvested Balances

The forfeiture of the balances in a Participant’s unvested Plan Account shall occur upon the earliest of the following events:

(a)The last day of the Plan Year in which the Participant incurs his or her fifth consecutive Break in Service following termination of employment; or

(b)The last day of the Plan Year in which the Participant receives a distribution of the vested percentage of his or her Plan Account as a result of his or her termination of employment.

If a Participant who received a distribution again becomes a Participant in the Plan, and the amount of his Plan Account in which he did not have a vested percentage was forfeited hereunder, the Employer shall then make a contribution for such Participant (or forfeitures of other Participants shall be applied for such Participant) if the conditions in (1) and (2), below are met:

(i)the amount received by the Participant was the entire vested percentage of his Plan Account; and

(ii)the Participant repays to the Trustee the amount of the vested percentage of his Plan Account distributed as a result of his termination of participation in the Plan, and such repayment is made prior to the earlier of five years after the first date on which he is subsequently re-employed by the Employer.

A Participant who does not have a vested interest in his or her Plan Account when the Participant Terminates Employment is deemed to have received a distribution of zero and the Participant’s Plan Account shall be forfeited hereunder; if such an Employee again becomes a Participant in the Plan prior to incurring a Break in Service, the Employer shall then make a contribution under the Plan on behalf of such Participant (or forfeitures of other Participants shall be applied for such Participant) to restore the forfeited amounts.

ARTICLE VIII

BENEFICIARIES

Upon becoming a Participant in the Plan, each Employee shall designate a primary Beneficiary and one or more secondary Beneficiaries. The designation shall be made in accordance with a procedure established by the Committee. Any Participant or Former Participant may, at any time, revoke or change his or her Beneficiary designation by filing a new designation form with the Committee. If no such designation is made, the Participant’s primary Beneficiary shall be the Participant’s Spouse, if known and living; or if there is no known surviving spouse, then the Participant’s issue at his death, per stirpes, or if there is no known surviving spouse and no issue living at the Participant’s death, then the Participant’s estate.

ARTICLE IX

INVESTMENT DIRECTION AND DIVERSIFICATION

9.1Investment Direction

Amounts allocated to the ESOP Stock Fund of any Participant or Former Participant shall be invested by the Company primarily in Company Stock.

9.2Diversification of ESOP Stock Fund

(a)Each Qualified Participant may elect within 90 days after the close of each Plan Year in the Qualified Election Period to direct the Plan as to the investment of 25 percent of the Participant’s ESOP Stock Fund to the extent such portion exceeds the amount to which a prior election under this Section 9.2 applies. In the case of the election in which the Qualified Participant can make his or her last election, the preceding sentence shall be applied by substituting 50 percent for 25 percent.

(b)The Qualified Participant may direct that portion of his or her ESOP Stock Fund referenced under Section 9.2(a) to be invested in any of the Investment Funds available under the Plan that do not include Company Stock.

(c)The Participant’s direction shall be provided to the Committee in writing, shall be effective no later that 180 days after the close of the Plan Year to which it applies and shall specify which, if any, of the Investment Funds selected in accordance with the provisions of Section 9.2(b).

ARTICLE X

VALUATION OF COMMON TRUST FUND

The Trustee shall determine the net worth of the Trust Fund by valuing the assets of the Plan and each Participant’s Plan Account for all Plan purposes as of each Valuation Date. The Committee, acting in its sole discretion, shall establish the procedures by which such valuations are performed. When the Participant’s Plan Account is credited with an allocation of any Employer Base Contributions, the value of such allocations shall be used to purchase shares and added to such Participant’s Plan Account. When any distributions, withdrawals and/or administrative fees are charged against the Participant’s Plan Account in accordance with the terms of the Plan, the number of shares equal in value to the amount paid from the Participant’s Plan Account shall be deducted from the outstanding shares.

ARTICLE XI

PAYMENT OF BENEFITS

11.1Time of Payment Upon Retirement

Subject to the following provisions of this Article XI, upon a Participant’s retirement after reaching his or her Normal Retirement Date, the entire balance of his or her Plan Account shall be distributed to the Participant as soon as reasonably practicable.

11.2Time of Payment Upon Termination of Employment

Subject to the following provisions of this Article XI, upon a Participant’s Termination of Employment, the vested portion of his or her Plan Account shall be distributed as soon as reasonably practicable after the Termination of Employment, unless the Participant chooses to defer distribution of his or her accrued benefit.

11.3Form of Benefit

Plan benefits to be paid to a Participant, or to a Participant’s Beneficiary as described in Article VIII, shall be paid as follows:

(a)in substantially equal annual installments of cash (or installments in Company Stock if elected in writing by the Participant prior to the date distribution begins) over the greater of (i) five years or (ii) if the balance held in a Participant’s Company Stock Account exceeds $915,000, as adjusted in accordance with the provisions of Code Section 409(o), over a period equal to five years plus one additional year (but not more than five additional year in the aggregate) for each $180,000, as adjusted in accordance with the provisions of Code Section 409(o), or portion thereof, that the balance held in the Participant’s Company Stock Account exceeds $915,000;

(b)in (i) one lump sum payment (including Company Stock if elected in writing by the Participant prior to the date distribution begins); or (ii) payments in cash and/or Company Stock made in substantially equal annual installments for a specified period not to exceed the joint life expectancy of the Participant and his or her designated Beneficiary, if any.

A Participant may elect to receive a distribution in the form of Company Stock upon distribution from the Plan only to the extent of the balance held in his or her Company Stock Fund as of the time of distribution and except as provided under Section 409(h)(2) of the Code.

11.4Notice Requirements and Election of Form

No less than thirty (30) days and no more than ninety (90) days prior to the date of any distribution to a Participant, prior to the Participant’s Normal Retirement Date, the Plan Administrator shall furnish a written notification to the Participant or the Beneficiary describing the forms of benefit in which the Participant or Beneficiary may elect to receive his or her benefit distribution and describing the Participant’s right to defer distribution until the Participant’s Normal Retirement Date, subject to Section 11.5. Not later than thirty (30) days after receiving the notification described above, the Participant or Beneficiary shall elect, on a form provided by the Employer, the form in which the benefit is to be distributed. Any election made pursuant to this Section 11.4 may be revoked at any time up to thirty (30) days prior to the commencement of benefit payments. A Participant may elect to waive the 30-day waiting period before the commencement of benefit payments if the distribution of the Participant’s benefit begins no earlier than seven (7) days after the written notification described in this Section 11.4 is provided to the Participant.

11.5Cash-Out Payments and Deferred Payment

Notwithstanding any provisions of the Plan to the contrary, if the vested portion of a Participant’s Plan Account upon Termination of Employment is $1,000 or less, then such vested portion shall be paid to the Participant in a lump sum payment as soon as practicable after the date the benefit first becomes payable to such Participant or Beneficiary.

If the vested portion of a Participant’s Plan Account upon Termination of Employment exceeds $1,000, the Participant may elect to receive an immediate distribution of benefits. If such Participant does not elect or consent to receive an immediate distribution, his or her Plan Account shall remain in the Trust until the earlier of the Participant’s Normal Retirement Date or the date as of which the Participant elects to receive a distribution of his or her Plan Account.

11.6Inability to Locate Benefit Recipient

If, after a reasonable effort has been made by the Plan Administrator to locate a Participant or Beneficiary who is entitled to receive a benefit and after sending written notice to his or her last known mailing address and to the United States Social Security Administration, such Participant or Beneficiary (hereafter in this Section “missing person”) cannot be located and no claim is filed for the payment of such benefits on or before the fifth anniversary of the date such benefits first became payable, such missing person may be presumed dead. As of the Plan Year’s last day which first follows, or coincides with, such fifth anniversary, the Plan Account of such missing person may be allocated as a forfeiture among the Plan Accounts of all Participants in the same proportion that each Participant’s Compensation for that Plan Year bears to the total Compensation of all Participants for such Plan Year. In the event that such missing person thereafter files a claim for such benefit while this Plan is in effect and demonstrates to the satisfaction of the Plan Administrator that he or she is in fact such missing person, the amounts which were allocated in accordance with the preceding sentence shall be paid to him or her by the Company.

11.7Claims Procedure

All claims shall be processed in accordance with the claims procedure described in the Summary Plan Description for the Plan.

11.8Required Commencement of Benefits

(a)Unless otherwise elected in writing by a former Participant, (such election may not result in a death benefit that is more than incidental), distribution of benefits under this Plan shall begin not later than the 60th day after the close of the Plan Year in which the latest of the following events occur:

(i)the date on which the Participant attains age 65,

(ii)the 10th anniversary of the year in which the Participant commenced participation in the Plan, or

(iii)the date the Participant terminates his service with the Employer.

(b)In no event may benefit payments be made later than April 1 of the calendar year following the later of the calendar year in which the Participant (1) separates from service, or (2) attains the age of seventy and one-half (70 ½); provided, that benefit payments to a Participant who is a five-percent (5%) owner, as defined in Section 416 of the Code, must be made not later than April 1 of the calendar year following the calendar year in which such Participant attains the age of seventy and one-half (70 ½). All distributions required under this Section 11.8(b) will be determined in accordance with the Treasury Regulations under Section 401(a)(9) of the Code.

11.9Direct Rollovers

Notwithstanding any provision of the Plan to the contrary that would otherwise limit a Distributee’s election under this Section, a Distributee may elect, at the time and in the manner prescribed by the Committee, to have any portion of an Eligible Rollover Distribution paid directly to an Eligible Retirement Plan specified by the Distributee in a Direct Rollover.

ARTICLE XII

DEATH BENEFITS

12.1Benefit Determination

Upon the death of a Participant prior to retirement or Termination of Employment, or upon the death of a Former Participant to whom payment of benefits has not commenced, the designated Beneficiary of the deceased Participant shall be entitled to receive a benefit equal in value to the sum of the amount in the Participant’s Plan Account as of the date such benefits are distributed. Such benefit shall commence, or shall be paid in a lump sum, in accordance with the provisions of this Article XII. Upon the death of a Former Participant to whom payment of benefits has commenced, the designated Beneficiary of the deceased Former Participant shall be entitled to receive a benefit equal in value to the amount, if any, in such Former Participant’s Plan Account which has not been distributed to the Former Participant prior to the date of his or her death. Such benefit, if any, shall be paid to the Beneficiary in the benefit form elected by the Former Participant.

12.2Proof of Death

The Committee may require such proof of death and such evidence of the right of any person to receive death benefit payments under the Plan as it may deem appropriate, and its determination shall be conclusive and binding.

12.3Form of Benefit

Except as otherwise provided in Article XI, Plan benefits to be paid to Beneficiaries of Participants or Former Participants under Article XII as a death benefit shall be in the form described in either subsection (a) or (b) below at the Beneficiary’s election:

(a)A lump sum payment to be made as soon as reasonably practicable after the date of the Participant’s or Former Participant’s death; or

(b)A payment of installments for a maximum of five (5) years after the date of the Participant’s death. For purposes of this Section 12.3, in the case of a Participant (including a Former Participant) who is married on the date of death, the Participant’s Beneficiary shall be the Participant’s surviving spouse unless the Participant has elected to have such benefit distributed to a Beneficiary other than the Participant’s spouse. Such an election shall be made under a procedure and on a form provided by the Committee and shall be effective only if the Participant’s spouse at date of death has consented in writing to the election, such consent is witnessed by a notary public and acknowledges the effect of the election. Such spousal consent is not required, however, if the Committee is satisfied that the Participant’s spouse cannot be located.

ARTICLE XIII

DISABILITY BENEFITS

13.1Benefit Determination

Upon being determined to be Totally and Permanently Disabled in accordance with the provisions of Section 13.2, a Participant shall be entitled to receive a benefit equal in value to the sum of the vested portion of the Participant’s Plan Account as of the date such benefits are distributed. Such benefit shall be paid in a lump sum, in accordance with the provisions of Section 13.3.

13.2Disability Determination

A Participant shall be determined to be Totally and Permanently Disabled for the purposes of this Article in accordance with the definition of Total and Permanent Disability set forth in Section 2.40.

13.3Form of Benefit

Plan benefits to be paid to a Participant on account of disability shall be paid in the form of a lump sum payment to be made as soon as reasonably practicable after the date the Participant has been determined to be disabled under Section 13.2 or, at the election of the Participant, upon a later date; provided, that such payment shall be made not later than the last day of the Plan Year in which the Participant attains age 65.

ARTICLE XIV

WITHDRAWALS

A Participant who has attained age sixty (60) may withdraw some or all of the amount in his or her vested Plan Account. Application to make such a withdrawal shall be made in accordance with a procedure established by the Committee.

ARTICLE XV

INALIENABILITY OF BENEFITS

The right of any Participant or Beneficiary to any benefit provided under the Plan or to the property contained in any separate Plan Account shall not be subject to voluntary or involuntary transfer, alienation or assignment, and (to the fullest extent permitted by law) shall not be subject to attachment, execution, garnishment, sequestration or other legal or equitable process, except in compliance with a Qualified Domestic Relations Order or pursuant to any judgment, decree, order or settlement as permitted under Section 401(a)(13)(C) of the Code. In the event a Participant or Beneficiary who is receiving or is entitled to receive a benefit provided under the Plan attempts to assign, transfer or dispose of such right, or if an attempt is made to subject said right to such process, such assignment, transfer or disposition shall be null and void.

ARTICLE XVI

ADMINISTRATION AND FIDUCIARIES

16.1General

The Company shall have the sole responsibility for making the contributions required under the Plan. The Company shall have the sole responsibility for appointing the Committee. The Committee shall have the sole responsibility for selecting the Trustee and for the administration of the Plan, as more fully described in Section 16.3. The Trustee shall have the sole responsibility for the administration of the Trust and the management of the assets held thereunder, as specifically provided in the Trust Agreement. It is intended that the Company, the Committee and the Trustee shall be responsible only for the proper exercise of their own powers, duties, responsibilities and obligations under the Plan and Trust Agreement, and shall not be responsible for any act or failure to act of another.

16.2Named Fiduciaries

(a)General

The following fiduciaries (referred to hereinafter individually as a “Named Fiduciary” and collectively as “Named Fiduciaries”) shall be responsible for the control, management and administration of the Plan and the control, management and disposition of the assets of the Trust Fund:

(i)the Company;

(ii)the Committee; and

(iii)the Trustee.

    Each Named Fiduciary shall have only such powers and responsibilities as are expressed in the Plan, and/or the Trust Agreement and any power or responsibility for the control, management or administration of the Plan or Trust Fund which is not expressly allocated to any Named Fiduciary, or with respect to which an allocation is in doubt, shall be deemed allocated to the Company. Each Named Fiduciary shall have no responsibility to inquire into the acts and omissions of any other Named Fiduciary in the exercise of powers or the discharge of responsibilities assigned to such other Named Fiduciary under the Plan.

(b)Allocation of Responsibility

Any Named Fiduciaries may, by agreement among themselves, allocate any responsibility or duty assigned to a Named Fiduciary under this Plan, other than the responsibility of the Trustee for the management and control of the Trust Fund, to one or more other Named Fiduciaries, provided, however, that any agreement respecting such allocation shall be in writing and shall be filed by the Committee with the records of the Plan. No such agreement shall be effective as to any Named Fiduciary which is not a party to such agreement until such Named Fiduciary has so consented in writing filed with the Committee. Any Named Fiduciary may, by written instrument filed by the Committee with the records of the Plan, designate a person who is not a Named Fiduciary to carry out any of its responsibilities under the Plan, other than the responsibility of the Trustee for the management and control of the Trust Fund, provided, however, that no such designation shall be effective as to any other Named Fiduciary until such other Named Fiduciary has received written notice of such designation.

(c)Employees of Fiduciaries

Any Named Fiduciary, or a person designated by a Named Fiduciary to perform any responsibility of a Named Fiduciary pursuant to the procedure described in the preceding paragraph, may employ one or more persons to render advice with respect to any responsibility such Named Fiduciary has under the Plan or such person has by virtue of such designation.

(d)Multiple Roles

Any person may serve in more than one fiduciary capacity with respect to the Plan, and any person who is a fiduciary may be a Participant if he or she otherwise satisfies the applicable Plan requirements to be a Participant.

16.3The Committee

(a)Organization

The Company shall administer the Plan through the Committee. The members of the Committee shall be appointed by the Company and may be removed by the Company at any time, with or without cause.

(b)Administration of the Plan

The Committee shall have sole and absolute discretion to administer the Plan, to construe and interpret the Plan documents; to decide all questions relating to an individual’s eligibility to participate in the Plan; to determine the amount, manner and time of any distribution of benefits or withdrawal under the Plan; to resolve any claim for benefits to decide any dispute arising under the Plan; and to appoint or employ advisors, including legal counsel, to render advice with respect to any of the Committee’s responsibilities under the Plan. Any construction, interpretation or application of the Plan shall be conducted solely by the Committee and shall be final, conclusive and binding upon all Participants and individuals claiming benefits under the Plan, and shall be given deference in all courts of law to the greatest extent allowed under the law and shall not be overturned or set aside by any court of law unless found to be arbitrary and capricious or made in bad faith.

(c)Records and Reports

The Committee shall be responsible for maintaining sufficient records to reflect the years of service completed by each Employee for purposes of the Plan, and the Compensation of each Participant for purposes of the Plan.

(d)Furnishing Trustee with Instructions

The Committee shall be responsible for furnishing the Trustee with instructions regarding all contributions to the Trust in accordance with Article IV, all distributions to Participants in accordance with Articles V, XI, XII, XIII and all in-service withdrawals by Participants in accordance with Article XIV. In addition, the Committee shall be responsible for furnishing the Trustee with any further information respecting the Plan which the Trustee may request for the performance of its duties or for the purpose of making any reports to any government agency that may be required of the Trustee.

(e)Allocation of Duties and Responsibilities

The Committee may by written instrument designate other persons to carry out any of its duties and responsibilities under the Plan. Any such duties or responsibilities thus allocated must be described in a written instrument. If a person other than an Employee of the Employer is so designated, such person must acknowledge in writing his or her acceptance of the duties and responsibilities allocated to him or her. The Employer shall pay all expenses authorized and incurred by the Committee in the administration of the Plan except to the extent such expenses are paid from the Trust.

(f)Liabilities

The Committee shall be indemnified and held harmless by the Company with respect to any liability, assessment, loss, expense or other cost, of any kind or description whatsoever, including legal fees and expenses, actually incurred by a member of the Committee on account of any alleged breach of responsibilities performed or to be performed hereunder or any action or proceeding, actual or threatened, which arises as a result of being a member of the Committee, provided such action or allegation does not arise as a result of the member’s own negligence, willful misconduct or lack of good faith.

ARTICLE XVII

FUNDING POLICY

The Committee shall establish a funding policy and method consistent with the objectives of the Plan and the requirements of Title I of ERISA. The Committee shall meet at least annually to review such funding policy and method. In establishing and reviewing such funding policy and method, the Committee shall endeavor to determine the Plan’s and Plan Participants’ short-term and long-term objectives and financial needs. All actions of the Committee taken pursuant to this Article XVII, and the reasons therefor, shall be communicated to the Trustee.

ARTICLE XVIII

AMENDMENT OF THE PLAN

18.1Power to Amend Plan

The Company shall have the right at any time, and from time to time, to amend, in whole or in part, any or all of the provisions of this Plan. Any written amendment to the Plan under this Section 18.1 shall be executed by a duly authorized representative of the Employer. However, no such amendment shall authorize or permit any part of the Trust Fund (other than such part as is required to pay taxes and administration expenses) to be used for, or diverted to, any purpose other than the exclusive benefit of the Participants or their Beneficiaries or cause any reduction in the amount previously credited to any Participant or permit any portion of the Trust Fund to revert to, or become the property of, the Employer. No amendment to this Plan which affects the rights, duties, or responsibilities of the Trustee may be made without the Trustee’s written consent.

18.2Effective Date of Amendment

Any amendment to the Plan shall become effective upon the date specified as the effective date of the amendment.

ARTICLE XIX

MERGER, CONSOLIDATION OR

TRANSFER OF PLAN ASSETS

In the event of the merger or consolidation of the Plan with, or the transfer of the assets and/or liabilities of the Plan to, another plan which is qualified under Section 401(a) of the Internal Revenue Code, each Participant or Beneficiary under this Plan shall be entitled to receive benefits immediately after the merger, consolidation or transfer which are equal to or greater than the benefits he or she would have been entitled to receive immediately prior to the merger, consolidation or transfer if the Plan had been terminated at such time.

ARTICLE XX

TERMINATION OF PLAN AND

DISCONTINUANCE OF CONTRIBUTIONS

20.1Plan Termination

The Company shall have the right, at any time, to terminate or partially terminate the Plan. Upon full or partial termination of the Plan, the Company shall direct the Trustee to distribute all assets remaining in the Trust, after payment of any expenses properly chargeable against the Trust, to the Participants in accordance with the Plan Account of each Participant at the time of distribution and in such manner as the Company shall determine. In the event of full or partial termination, each affected Participant shall be fully vested in all of such Participants’ Plan Account.

20.2Discontinuance of Employer Contributions

In the event of complete discontinuance of the Employer Contributions to the Plan, each Participant shall be fully vested in such Participant’s Plan Account.

ARTICLE XXI

MISCELLANEOUS

21.1Participants’ Rights

Except as may be otherwise specifically provided by law, neither the establishment of the Plan nor any modification thereof, nor the creation of any Plan Account, nor the payment of any benefit, shall be construed to give to any Participant or to any other person a legal or equitable right against the Company, the Employer, any director, officer or employee thereof, the Committee or the Trustee. Under no circumstances shall the terms of employment of any Employee be deemed to have been modified or in any way affected by the establishment of the Plan, and nothing contained in this Plan document, the Trust Agreement or any related document shall require the Employer to retain any Employee in its service.

21.2Benefits Supported Only by Trust Fund

Any person having any claim for any benefit under the Plan shall look solely to the assets of the Trust Fund for satisfaction. In no event will the Committee, the Company, the Employer or the Trustee, or any of their employees, officers, members of their Board of Directors or agents, be liable in their individual capacities to any person whomsoever for the payment of benefits under the provisions of the Plan except to the extent that liability is imposed by Federal law.

21.3Discrimination

The Committee shall administer the Plan in a uniform and consistent manner with respect to all Participants and Beneficiaries and shall not permit discrimination in favor of officers, stockholders or Highly Compensated Employees.

21.4Claims

Any payment to a Participant or Beneficiary or to their legal representative, or heirs-at-law, made in accordance with the provisions of this Plan shall to the extent thereof be in full satisfaction of all claims hereunder against the Company, the Trustee, the Committee and the Employer, any of whom may require such person, his or her legal representative or heirs-at-law, as a condition precedent to such payment, to execute a receipt and release therefor in such form as shall be determined by the Company, the Trustee, the Committee or the Employer as the case may be.

21.5Construction of Agreement

The Plan shall be construed in accordance with the laws of the Commonwealth of Kentucky, and all provisions thereof shall be administered in accordance with the laws of that State.

21.6Savings Clause

In the event that any one or more of the terms, conditions, or provisions, or any part thereof, contained in this Plan, or the application thereof to any person or circumstance, shall for any reason, in any respect, or to any extent be held to be invalid, illegal, or unenforceable by any court or governmental agency of competent jurisdiction, such invalidity, illegality, or unenforceability shall not affect the remainder of such term, condition, or provision, nor any other provision of this Plan, nor the application of such term, condition, or provision to persons or circumstances other than those as to which it is held invalid, illegal, or unenforceable, and this Plan shall be construed as if such invalid, illegal, or unenforceable term, condition, or provision had never been contained herein, and each term, condition, or provision hereof shall be valid and enforced to the fullest extent permitted by law.

21.7Number and Gender

Whenever appropriate, words used herein in the singular shall be construed as though used in the plural, words used herein in the plural shall be construed as though used in the singular, words used herein in the masculine gender shall be construed as though used in the feminine gender, and words used herein in the feminine gender shall be construed as though used in the masculine gender.

21.8Headings

Headings of articles, sections and paragraphs of the Plan have been inserted for convenience of reference and constitute no part of the Plan.

21.9Legal Action

(a)Necessary Parties

Except as may be otherwise specifically provided by law with respect to any action or proceeding involving the Plan or the Trust, or any property constituting part or all thereof, or the administration thereof, the Company, the Employer and the Trustee shall be the only necessary parties thereto and no Employee or former Employee of the Employer, any Beneficiary or any other person having or claiming to have an interest in the Trust or under the Plan shall be entitled to any notice of such action.

(b)Final Judgment Binding

Except as may be otherwise specifically provided by law, any final judgment which is not appealed or appealable that may be entered in any such action or proceeding shall be binding and conclusive on the Company, the Employer and the Trustee and all persons having or claiming to have any interest in the Trust or under the Plan.

21.10Entire Plan

This Plan contains the entire understanding and undertaking of the Company and its Affiliates, if any, with respect to the subject matter hereof, and supersedes any and all prior and contemporaneous undertakings, agreements, understandings, inducements or conditions, whether express or implied, oral or written, except as herein contained. This Plan may not be modified or amended other than by a written document adopted or executed pursuant to the terms hereof.

21.11Plan Binding on All Parties

This Plan shall be binding upon the parties hereto, their successors and assigns, and upon all Plan Participants and their Beneficiaries, heirs, executors, administrators and assigns.

ARTICLE XXII

RIGHTS OF REEMPLOYED VETERANS

22.1In General

To the extent required by the Uniformed Services Employment and Reemployment Rights Act of 1994 (“USERRA”) and Section 414(u) of the Code, effective December 12, 1994, and in accordance with this Article XXII, a Reemployed Veteran shall be entitled to the restoration of certain benefits under the Plan that would have accrued, or that he or she would have received, under the Plan but for his or her absence from the employ of the Employer due to Qualified Military Service. “Reemployed Veteran” shall be defined as an Employee who left the employ of the Employer in order to perform service in the Armed Services of the United States, and subsequently was reemployed by the Employer pursuant to USERRA. “Qualified Military Service” shall be defined as service in the uniformed services (as defined in chapter 43 of title 38, United States Code) performed by the Reemployed Veteran whose entitlement to reemployment rights pursuant to USERRA arose with respect to such service.

22.2Crediting of Period of Qualified Military Service

To the extent required by USERRA and Section 414(u) of the Code, the Reemployed Veteran, for all purposes under the Plan, shall be credited with Hours of Service, as applicable, for the period of his or her absence from employment with the Employer due to Qualified Military Service, in accordance with the regulations or other rules provided by the Internal Revenue Service. In no event shall such Reemployed Veteran’s absence due to Qualified Military Service constitute a Break in Service under Section 2.4.

22.3Forfeitures and Earnings

To the extent permitted under applicable law, a Reemployed Veteran shall not share in the allocation of Forfeitures for any Plan Year in which the Reemployed Veteran was performing Qualified Military Service.

ARTICLE XXIII

DISTRIBUTION TO ALTERNATE PAYEE

23.1Benefit Determination.

Upon obtaining a Qualified Domestic Relations Order that complies with the provisions of Section 2.35, an alternate payee shall be entitled to receive a benefit from the Plan Account of a Participant or a Former Participant equal to the amount designated in the Qualified Domestic Relations Order. Such benefit shall commence, or shall be paid in a lump sum, in accordance with the provisions of Section 23.2.

23.2Form of Benefit.

Plan benefits to be paid to an alternate payee shall be in any form in which such benefits could be paid to the Participant or Former Participant. Once the Qualified Domestic Relations Order has been approved by the Plan Administrator, such distribution shall commence on the date specified in the order.

ARTICLE XXIV

PRIOR SERVICE CREDIT RULE

The Committee, acting in its sole discretion, may direct that credit for prior employment service be granted to an individual who becomes an Employee, including but not limited to individuals who become Employees in connection with the acquisition by the Employer of the entity or business by which such individual was previously employed. At the discretion of the Company, such credit will be awarded for the purpose of determining such individual’s Years of Eligibility Service and/or Years of Vesting Service under the Plan. To the extent so directed by the Company, credit for prior service shall be granted on the basis by which the individual would have received credit for determining his or her Years of Eligibility Service and Years of Vesting Service had such service been completed with the Employer.

ARTICLE XXV

SPECIAL PROVISIONS

25.1Put Option.

(a)If the Company Stock ceases to be readily tradable on an established market, then any Participant or Former Participant, or a Beneficiary of either, who is otherwise entitled to a distribution from the Plan shall have the right (hereafter referred to as “Put Option”) to require that the Company repurchase any Company Stock allocated to his or her Employer Base Contribution Account, valued under the valuation methodology used pursuant to Section 11.3, in the event such Company Stock is distributed from the Plan. The Put Option shall only be exercisable during the 15-month period that begins on the date such Company Stock that is subject to the Put Option is distributed by the Plan.

(b)If the Company Stock allocated to an Employer Base Contribution Account is publicly traded without restriction when distributed by the Plan but ceases to be so traded within fifteen (15) months after the distribution thereof, then the Company shall notify such security holder in writing on or before the tenth (10^th) day after the date the Company Stock ceases to be so traded. The notice shall state that for the remainder of the 15-month period the Company Stock is subject to a Put Option. The number of days between such tenth (10^th) day and the date on which notice is actually given, if later than the tenth (10^th) day, shall be added to the duration of the Put Option. The notice shall inform the security holders of the terms of the Put Option that they hold.

(c)The amount paid in Company Stock under the Put Option shall be paid within a reasonable time and under reasonable terms. Generally, the payment terms shall not exceed five (5) years from the date the Put Option is exercised. There shall be adequate security provided and reasonable interest paid on the unpaid balance due under this section.

25.2Dividend Reinvestment Election.

At the election of the Participant, cash dividends paid on Company Stock held in the ESOP Stock Fund in which the Participant has a vested interest may be either:

(a)reinvested in Company Stock held in the ESOP Stock Fund; or

(b)paid in cash directly to the Participant or contributed to the Plan and, not later than 90 days after the end of the Plan Year in which the dividends are so contributed in cash, paid by the Plan to the Participant.

Any elections to receive cash in accordance with subparagraph (b) shall be made at the time and in the manner determined in the sole discretion of the Committee.

****

IN WITNESS WHEREOF, the Plan hereby is executed, effective as set forth above, on the 27th day of December, 2006.

           COMMUNITY TRUST BANCORP, INC.

           By:/s/ Jean R. Hale

Chairman, President and CEO

EX-10.2

EXHIBIT 10.2

AMENDMENT NUMBER ONE

TO THE

COMMUNITY TRUST BANCORP, INC.

SAVINGS AND EMPLOYEE STOCK OWNERSHIP PLAN

Pursuant to the powers of amendment reserved in Section 20.1 of the Community Trust Bancorp, Inc. Savings and Employee Stock Ownership Plan, as amended and restated effective January 1, 1999 (the “Plan”), Community Trust Bancorp, Inc. hereby amends the Plan as follows:

1.

The Plan is amended by adding thereto the following new Sections 2.4A:

2.4A“Catch Up Contributions” means a voluntary contribution made by an eligible Participant to the Trust under the Plan pursuant to Section 4.5.

2.

Section 2.10 of the Plan is amended to add the following sentence at the end thereof:

“Notwithstanding the above, effective for any Plan Years beginning after December 31, 2001, a Participant’s Compensation for purposes of the Plan shall not exceed $200,000, as adjusted in accordance with Section 401(a)(17) of the Code.”

3.

Section 2.19 of the Plan is amended by deleting the last sentence thereof in its entirety and by substituting the following therefor:

“Effective January 1, 2002, the term Eligible Retirement Plan also shall include an eligible deferred compensation plan described in Section 457(b) of the Code which is maintained by an eligible employer described in Section 457(e)(1)(A) and an annuity contract described in Section 403(b) of the Code. In the case of an Eligible Rollover Distribution to the surviving spouse, prior to January 1, 2002, an Eligible Retirement Plan is an individual retirement account described in Section 408(a) of the Code or an individual retirement annuity described in Section 408(b) of the Code.”

4.

Section 2.20 of the Plan is amended to delete the word “or” after subsection (e), to add the following new subsection (f) and to reletter the remaining subsection accordingly.

“(f)any withdrawal on account of financial hardship pursuant to Section 15.2; or”

5.

The Plan is amended by deleting Section 2.53 in its entirety and by substituting therefor a new Section 2.53 as follows:

“2.53‘Total and Permanent Disability’ means the Participant has become entitled to receive disability benefits either under a long term disability plan sponsored by the Company or one of its Affiliates or under the United States Social Security Act.”

6.

Effective January 1, 1999, Section 2.48 of the Plan shall be deleted in its entirety and all of the remaining sections in Article II, including all internal references to the same, shall be renumbered accordingly.

7.

The Plan is amended by deleting Section 3.2 in its entirety and by substituting therefor a new Section 3.2 (with no change to the caption) as follows:

“A Former Participant who returns to employment and becomes a Covered Employee may commence participation as of the date he or she again becomes a Covered Employee. An Employee who has satisfied the eligibility requirements of this Article III but does not become a Participant on the next Entry Date due to a Break in Service, a Leave of Absence or because he or she is not a Covered Employee on that Entry Date may commence participation upon the Entry Date next following the termination of the Break in Service or Leave of Absence or the date he or she again becomes a Covered Employee. An Employee who has satisfied the eligibility requirements of this Article III but who Terminates Employment prior to his or her applicable Entry Date, and who is re-employed after that Entry Date, shall commence participation immediately upon reemployment. Effective January 1, 2002, notwithstanding any other provisions herein to the contrary, any Former Participant or terminated Employee who subsequently returns to employment after a Break in Service shall be required to complete 1,000 Hours of Service in the twelve (12) consecutive months beginning on his or her date of reemployment, or, failing that, in any Plan Year that commences after his or her date of reemployment. Upon completion of 1,000 Hours of Service, the Plan participation for such Former Participant or Employee (except with regard to entitlement to contributions under the Plan) shall be retroactive to his or her date of reemployment.”

8.

Section 4.1 of the Plan is amended to insert the phrase “(effective for Plan Years beginning on or after January 1, 2003, fifteen percent (15%))” after the phrase “nor more than twelve (12%)” in the first sentence thereof .

9.

Section 4.1 of the Plan is amended by deleting the second sentence thereof in its entirety and by substituting the following therefor:

“The total amount of such contributions under this Plan and any other cash or deferred arrangement in which the Employee participates may not exceed eleven thousand dollars ($11,000) for any Plan Year, as adjusted in accordance with Section 402(g) of the Code.”

10.

The Plan is amended by adding thereto the following new Section 4.5:

“4.5Catch Up Contributions.

Effective as of October 1, 2002, each Participant that is eligible to make Salary Deferral Contributions pursuant to Section 4.1 and who will have attained age 50 before the close of the Plan Year shall be eligible to make a Catch Up Contribution in accordance with, and subject to the limitations of, Section 414(v) of the Code. Such contributions shall be credited to the Participant’s Salary Deferral Contribution Account and shall be fully vested and nonforfeitable at all times. Such Catch Up Contributions shall not be taken into account for purposes of the provisions of the Plan implementing the requirements of Sections 402(g) and 415 of the Code. In addition, the Plan shall not be treated as failing to satisfy the provisions of the Plan implementing the requirements of Sections 401(k)(3), 410(b) or 416 of the Code, as applicable, by reason of the making of such Catch Up Contributions.”

11.

Sections 5.7 and 5.8 of the Plan are deleted in their entirety.

12.

Section 6.5(a) of the Plan is amended to change the reference to “Section 6.5(f)” in the last sentence thereof to “Section 6.5(e).”

13.

Section 7.1(a) of the Plan is amended by deleting the phrase “(a) Thirty Thousand Dollars ($30,000) or (b) twenty-five percent (25%)” in the sole sentence thereof and by substituting the phrase “(a) Forty Thousand Dollars ($40,000) or (b) one-hundred percent (100%)” therefor.

14.

Section 8.1 of the Plan is amended to add the following sentences at the end thereof:

“Notwithstanding the above, effective January 1, 2002, a Participant shall become one-hundred percent (100%) vested in his or her Matching Contribution Account after being credited under the Plan with three (3) or more Years of Vesting Service. Effective September 1, 2002, a Participant shall become one-hundred percent (100%) vested in his or her Employer Base Contribution Account after being credited under the Plan with three (3) or more Years of Vesting Service.”

15.

Section 11.1 of the Plan is amended to insert the phrase “Catch Up Contributions,” after the phrase “Salary Deferral Contributions” in the fourth sentence thereof.

16.

Effective January 1, 1999, Section 12.3(a) of the Plan is amended to change the reference to “$750,000” wherever it appears to “$735,000.”

17.

Section 12.4 of the Plan is amended to add the following new sentence to the end thereof:

“Effective January 1, 2002, a Participant may elect to waive the 30-day waiting period before the commencement of benefit payments if the distribution of the Participant’s benefit begins no earlier than seven (7) days after the written notification described in this Section 12.4 is provided to the Participant.”

18.

Section 12.5 of the Plan is amended to add the following new paragraph at the end thereof:

“Effective April 1, 2002, for purposes of determining if a Participant’s Plan Accounts exceed $5,000, the Plan Administrator shall exclude any amount held in the Participant’s Rollover Contribution Account.”

19.

Section 12.8(b) of the Plan is amended to add the following sentence at the end thereof:

“All distributions required under this Section 12.8(b) will be determined in accordance with the Treasury Regulations under Section 401(a)(9) of the Code. Distributions required to begin under this Section 12.8(b) during the Plan Year ended December 31, 2002 shall be determined in accordance with the final and temporary Treasury Regulations under Section 401(a)(9) of the Code issued in April 2002.”

20.

Section 14.2 of the Plan is amended by deleting the second and third sentences thereof in their entirety.

21.

Effective January 1, 1999, the first sentence of Section 15.2(a) of the Plan is amended by deleting the same in its entirety and by substituting the following therefor:

“A Participant may withdraw some or all of the amount in his or her Salary Deferral Contribution Account attributable to Salary Deferral Contributions and/or Catch Up Contributions (earnings on such contributions shall not be eligible for withdrawal) if such a withdrawal is necessary due to the immediate and heavy financial need of the Participant.”

22.

Section 18.1(a) of the Plan is amended by deleting the last sentence thereof in its entirety and by substituting the following therefor:

“The value of the accumulated benefit for any Employee as of a Plan Year shall include (i) with respect to Plan Years beginning prior to January 1, 2002, the aggregate distributions, including withdrawals, made with respect to such Employee under the Plan during the five-year period ending on the Determination Date and (ii) with respect to Plan Years beginning on or after January 1, 2002, any part of any account balance distributed on account of a Participant’s termination from employment, death or disability in the one-year period ending on the applicable Determination Date.”

23.

Section 18.2(b) of the Plan is amended to add the following sentence at the end thereof:

“Notwithstanding the above, effective September 1, 2002, in the event that the Plan is top heavy, the Committee shall calculate the Vested Percentage of a Participant’s Employer Base Contribution Account and Matching Contribution Account in accordance with the provisions for vesting set forth in Section 8.1 or the above schedule, whichever shall provide the Participant with a higher vested benefit, and with respect to Discretionary Contribution Account in accordance with the above schedule.”

24.

Unless otherwise indicated, this Amendment Number One shall be effective as of January 1, 2002.

****

COMMUNITY TRUST BANCORP, INC.

By: /s/ Jean R. Hale

Title:Chairman, President, and CEO

AMENDMENT NUMBER TWO

TO THE

COMMUNITY TRUST BANCORP, INC.

SAVINGS AND EMPLOYEE STOCK OWNERSHIP PLAN

Pursuant to the powers of amendment reserved in Section 20.1 of the Community Trust Bancorp, Inc. Savings and Employee Stock Ownership Plan, as amended and restated effective January 1, 1999 (the “Plan”), Community Trust Bancorp, Inc. hereby amends the Plan as follows:

1.

The Plan is amended by deleting Section 2.10 in its entirety and by substituting the following therefor:

“2.10“Compensation” means the aggregate of all payments for personal services paid by the Employer to a Participant during a Plan Year subsequent to the Participant’s Entry Date, including base pay, overtime, bonuses, one-time payments, incentive compensation, commissions and absence pay including payments for sick, personal, vacation, bereavement, jury duty, disability and work related training; provided, Compensation shall exclude any reimbursed personal automobile expenses, car allowances or car add-ins, relocation expenses, excess life insurance premiums under Section 79 of the Code, stock based compensation includible in a Participant’s gross income and any severance payments or amounts paid upon the cancellation of an employment contract. Compensation shall be determined without regard to any reduction in remuneration resulting from an election to have Salary Deferral Contributions made to the Plan or for any other elective amounts that are not includible in the gross income of a Participant under Section 125 or 132(f)(4) of the Code. Notwithstanding the above, a Participant’s Compensation for purposes of the Plan shall not exceed $205,000, as adjusted in accordance with Section 401(a)(17) of the Code.”

2.

Effective January 1, 2002, Section 7.1(a) of the Plan is amended by inserting the phrase “, as adjusted for cost living increases under Section 415(d) of the Code and regulations thereunder,” after the phrase “Forty Thousand Dollars ($40,000).”

3.

Section 5.2 of the Plan is amended by deleting the last sentence thereof in its entirety and by substituting the following therefor:

“The Matching Contribution will be determined as of the end of each payroll period and will be allocated not later than the last day of each calendar quarter within a Plan Year to the Matching Contribution Account of the Participant receiving the Matching Contribution.”

4.

Unless otherwise indicated, this Amendment Number Two shall be effective as of January 1, 2004.

IN WITNESS WHEREOF, the Plan is hereby amended effective as of the dates set forth above.

COMMUNITY TRUST BANCORP, INC.

By: /s/ Jean R. Hale

Title:Chairman, President, and CEO

AMENDMENT NUMBER THREE

TO THE

COMMUNITY TRUST BANCORP, INC.

SAVINGS AND EMPLOYEE STOCK OWNERSHIP PLAN

Pursuant to the powers of amendment reserved in Section 20.1 of the Community Trust Bancorp, Inc. Savings and Employee Stock Ownership Plan, as amended and restated effective January 1, 1999 (the “Plan”), Community Trust Bancorp, Inc. hereby amends the Plan as follows:

1.

The Plan is amended by adding thereto the following new Section 2.29A:

“2.29A ‘Heritage Plan’ means the Heritage Community Bank 401(k) Profit Sharing Plan as in effect as of June 10, 2005.”

2.

Section 2.35 of the Plan is amended by adding the following sentence to the end thereof:

“This account shall include matching contributions transferred from the Heritage Plan.”

3.

Section 2.47 of the Plan is amended by adding the following sentence to the end thereof:

“This account shall include qualified non-elective contributions transferred from the Heritage Plan.”

4.

Section 2.48 of the Plan, as renumbered by Amendment Number One, is amended by adding the following sentence to the end thereof:

“This account shall include rollover contributions transferred from the Heritage Plan.”

5.

Section 2.50 of the Plan, as renumbered by Amendment Number One, is amended by adding the following sentence to the end thereof:

“This account shall include pre-tax salary deferral contributions transferred from the Heritage Plan.”

6.

Effective March 28, 2005, Section 12.5 of the Plan is amended by striking it in its entirety and inserting the following:

“Notwithstanding any provisions of the plan to the contrary, if the vested portion of a Participant’s Plan Accounts upon Termination of Employment is $1,000 or less, then such vested portion shall be paid to the Participant in a lump sum payment as soon as practicable after the date the benefit first becomes payable to such Participant.  If the vested portion of a Participant’s Plan Accounts upon Termination of Employment exceeds $1,000, the Participant may elect to receive an immediate distribution of benefits. If such Participant does not elect or consent to receive an immediate distribution, his or her Plan Account shall remain in the Trust until the earlier of the Participant’s Normal Retirement Date or the date as of which the Participant elects to receive a distribution of his or her Plan Accounts.”

7.

Section 15.2(c) of the Plan is amended by adding the phrase “(including amounts necessary to pay any income taxes or penalties reasonably anticipated to result from the withdrawal)” to the end of subsection (i) thereof.

IN WITNESS WHEREOF, the Plan is hereby amended as set forth in this Amendment Number Three, effective, except as noted above, as of March 28, 2005.

COMMUNITY TRUST BANCORP, INC.

By: /s/ Jean R. Hale

Title:Chairman, President, and CEO

AMENDMENT NUMBER FOUR

TO THE

COMMUNITY TRUST BANCORP, INC.

SAVINGS AND EMPLOYEE STOCK OWNERSHIP PLAN

Pursuant to the powers of amendment reserved in Section 20.1 of the Community Trust Bancorp, Inc. Savings and Employee Stock Ownership Plan, as amended and restated effective January 1, 1999 (the “Plan”), Community Trust Bancorp, Inc. hereby amends the Plan as follows:

1.

Section 4.1 of the Plan is amended by adding a new sentence between the fourth and fifth sentences to read as follows:

“The Plan may use any reasonable method for computing the income or loss allocable to excess Salary Deferral Contributions, provided that the method does not violate Code Section 401(a)(4), is used consistently for all Participants and for all corrective distributions under the Plan for the Plan Year, and is used by the Plan for allocating income to Participants’ accounts. The Plan may also elect to use a method of allocating Plan Year or gap period income as specified under Treasury Regulation section 1.402(g)-1, as such regulation may be finalized or Treasury Regulation section 1.401(k)-2(b)(2)(iv). Gap period income need only be included to the extent the Participant is or would be credited with allocable gain or loss on those excess deferrals for such gap period, if the total account were to be distributed.”

2.

Section 4.3 of the Plan is amended by inserting a new paragraph to the end thereof to read as follows:

“The Plan may use any reasonable method for computing the income or loss allocable to excess contributions, provided that the method does not violate Code Section 401(a)(4), is used consistently for all Participants and for all corrective distributions under the Plan for the Plan Year, and is used by the Plan for allocating income to Participants’ accounts. Alternatively, the Plan may elect to use a method of allocating Plan Year or gap period income specified under Treasury Regulation Section 1.401(k)-2(b)(2)(iv). Gap period income need only be included to the extent the Participant is or would be credited with allocable gain or loss on those excess contributions for such gap period, if the total account were to be distributed.”

3.

Section 4.4 of the Plan is amended by inserting a new paragraph in-between the first and second paragraphs to read as follows:

“For purposes of this Section, the actual deferral percentage for any Participant who is a Highly Compensated Employee and who is eligible to have elective deferrals allocated to his or her accounts under two or more arrangements described in Code Section 401(k), that are maintained by the Employer (or of any trade or business, whether or not incorporated, which is considered to be under common control with the Employer under regulations prescribed by the Secretary of the Treasury pursuant to Code Section 414(c)), shall be determined as if such elective deferrals were made under a single plan. If a Highly Compensated Employee participates in two or more cash or deferred arrangements that have different plan years, all elective deferrals made during the Plan Year under all such plans and arrangements shall be aggregated.”

4.

Section 5.1 of the Plan is amended by inserting the following sentence to the end thereof:

“Effective with respect to Plan Years commencing after December 31, 2006, and contingent upon the creation of a separate employee stock ownership plan effective as of January 1, 2007, no contributions shall be made by the Employer under this Section 5.1(a).”

5.

Section 5.3 of the Plan is amended by inserting the following sentence to the end thereof:

“Any Qualified Non-Elective Contributions made by the Employer under this Section 5.3 that are made to correct any ADP or ACP failure shall comply with the requirements set forth in Treasury Regulation section 1.401(k)-2(a)6) or 1.401(m)-2(a)(6), as in effect on January 1, 2006.”

6.

Section 5.5 of the Plan is amended by inserting the following paragraph to the end thereof:

“The Plan may use any reasonable method for computing the income or loss allocable to excess aggregate contributions, provided that the method does not violate Code Section 401(a)(4), is used consistently for all Participants and for all corrective distributions under the Plan for the Plan Year, and is used by the Plan for allocating income to Participants’ accounts. Alternatively, the Plan may elect to use a method of allocating Plan Year or gap period income specified under Treasury Regulation Section 1.401(m)-2(b)(2)(iv). Gap period income need only be included to the extent the Participant is or would be credited with allocable gain or loss on those excess aggregate contributions for such gap period, if the total account were to be distributed.”

7.

Section 5.6 of the Plan is amended by inserting the following sentence to the end thereof:

“For purposes of this Section, the actual contribution percentage for any Participant who is a Highly Compensated Employee and who is eligible to participate in more than one plan described in Code Section 401(a), or arrangements described in Code Section 401(k), that are maintained by the Employer (or of any trade or business, whether or not incorporated, which is considered to be under common control with the Employer under regulations prescribed by the Secretary of the Treasury pursuant to Code Section 414(c)), shall be determined as if the total of such contribution percentage amounts were made under a single plan. If a Highly Compensated Employee participates in two or more cash or deferred arrangements that have different plan years, all contribution percentage amounts made during the Plan Year under all such plans and arrangements shall be aggregated.”

8.

Section 15.2(c)(ii) of the Plan is amended by deleting that section in its entirety and replacing it with the following:

“(ii)the Participant has obtained all distributions (other than hardship distributions), including any distributions of ESOP dividends under Code Section 404(k), and all non-taxable loans, currently available under the Plan and under all plans maintained by the Employer;”

IN WITNESS WHEREOF, the Plan is hereby amended as set forth in this Amendment Number Four, effective, except as noted above, as of January 1, 2006.

COMMUNITY TRUST BANCORP, INC.

By: /s/ Jean R. Hale

Title:Chairman, President, and CEO

EX-10.7

EXHIBIT 10.7

COMMUNITY TRUST BANCORP, INC.

SENIOR MANAGEMENT INCENTIVE

COMPENSATION PLAN

EFFECTIVE JANUARY 1, 2007

ARTICLE I

OBJECTIVES

Section 1.01

This plan is designed to reward senior management for meeting or exceeding industry standards for profitability and adopted to achieve the following objectives:

(a)Increase the profitability and growth of Community Trust Bancorp, Inc. in a manner which is consistent with other goals of the Company, its stockholders and its employees,

(b)Provide executive compensation which is competitive with other financial institutions,

(c)Attract and retain personnel of outstanding ability and encourage excellence in the performance of individual responsibilities,

(d)Motivate and reward those members of management who contribute to the success of the Company,

(e)Distinguish among the performance contributions of some individuals by providing financial recognition for individual performance, as well as group performance, and

(f)Allow the flexibility which permits revision and strengthening from time to time to reflect changing organizational goals and objectives.

ARTICLE II

DEFINITIONS

Section 2.01

As used herein, the following words and phrases shall have the meanings below unless the context clearly indicates otherwise:

(a)“Annual Incentive Plan” or “Annual Plan” shall mean the Senior Management Incentive Compensation Plan set forth in this document and all amendments thereto.

(b)“Award Period” means one Fiscal Year.

(c)“Board” means the Board of Directors of Community Trust Bancorp, Inc.

(d)“Company” means Community Trust Bancorp, Inc., and its subsidiaries.

(e)“Compensation Committee” means the Compensation Committee of the Board.

(f)“Disability” means the total and permanent disability of a participant as defined by any Long-Term Disability Plans in effect for the Company and as thereafter may be amended.

(g)“Effective Date” means the date upon which the Plan shall become effective.

(h)“Fiscal Year” means the accounting period adopted by the Company for federal income tax purposes.

(i)“Participant” means a person designated by the Company to participate in the Plan.

(j)“Plan” shall mean the Company’s Senior Management Incentive Compensation Plan.

(k)“Salary” or “Salaries” shall mean the base salary in effect for each participant as of the last pay period in December of the Award Period.

(l)“Stock Option” shall mean Stock Options granted under the Community Trust Bancorp, Inc. 1998 Stock Option Plan as hereinafter may be amended including substitutions or replacements of the Plan. Such options shall be Incentive Stock Options to the extent possible under tax laws in effect at the time the option is awarded.

ARTICLE III

ADMINISTRATION OF THE PLAN

Section 3.01

The Compensation Committee shall administer the Plan and employ such other agents as may reasonably be required to administer the Plan.

Section 3.02

The Compensation Committee shall adopt such rules and regulations of general application as are beneficial for the administration of the Plan and shall make all discretionary decisions involving a participant of the Plan. Said committee shall also have the right to interpret the Plan, to determine the Effective Date, and to approve all employees who are to participate in the Plan.

Section 3.03

A majority of the Compensation Committee shall constitute a quorum. The acts of a majority of the members present at any meeting at which there is a quorum shall be valid acts. Acts reduced to and approved in writing by a majority of said committee shall also be valid acts.

Section 3.04

All incentive compensation payable under the Plan shall be paid from the general assets of the Company. To the extent that any person acquires a right to receive payments under the Plan, such right shall be no greater than the right of any unsecured creditor of the Company.

Section 3.05

The Compensation Committee may authorize the Chairman, President and CEO of the Company to send a written notice of such Plan to each selected Participant. No person shall have the right to be included in the Plan until receiving said notice in the form of Attachment "A" hereto.

Section 3.06

All costs and expenses involved in the administration of this Plan shall be paid by the Company.

Section 3.07

Any determination or action of the Compensation Committee or the Board shall be final, conclusive and binding on all participants and their beneficiaries, heirs, personal representatives, executors and administrators.

Section 3.08

The Board of Directors, in its sole discretion, may amend, modify or terminate the Plan at any time. The Board shall also annually review the pre-determined performance standards and may amend such schedules in its sole discretion.

ARTICLE IV

PARTICIPANT ELIGIBILITY

Section 4.01

The following groups shall participate in the Plan:

(a)Group I shall consist of the Executive Committee of the Corporation.

(b)Group II shall consist of the (1)CTB officers responsible for the divisions of Commercial Lending, Consumer Lending, Residential Real Estate Lending, Finance, Sales and Marketing, Human Resources, Compliance, Facilities Management and (2) the Presidents of each market

(c)  Group III shall consist of Senior Vice Presidents of consolidated functions who are selected for participation by the Compensation Committee.

(d) Individuals below SVP level may be recommended and approved by the Compensation Committee for special awards of options for extraordinary performance.

Section 4.02

Voluntary or involuntary termination of full-time employment of a Participant prior to the payment of incentive awards for an Award Period will result in such Participant forfeiting any incentive compensation for the Award Period (except as provided in Section 4.03 herein).

Section 4.03

If a Participant dies, retires, becomes disabled, or is granted a leave of absence during an Award Period, the Compensation Committee may, at its discretion or under such rules as it may have prescribed, award partial incentive compensation based on the level of achievement in relation to goals established for the Award Period.

Section 4.04

Directors who are also employees of the Company shall be eligible to participate in the Plan. However, a director who is compensated on the basis of a fee or retainer, as distinguished from a salary, shall not be eligible.

Section 4.05

New employees of the Company and persons promoted during the Award Period who were not eligible to participate in the Plan at the beginning of the Award Period, but have become a member of Group I, II, or III shall participate in the Plan so long as such eligibility came into existence no later than six (6) months after the beginning of said Award Period. If a person becomes eligible at a date later than six (6) months into an Award Period, such person shall not be a Participant under this Plan until the first day of the next Award Period.

ARTICLE V

PAYMENT TO PARTICIPANTS

Section 5.01

Incentive compensation to be awarded under the Plan shall be paid to Participants within thirty days after the close of the Award Period. Awards are not earned until paid to Participants.

Section 5.02

A Participant may elect to defer payment of all or part of his or her incentive compensation so long as the Participant requests such deferred payment under the terms of the Company’s Voluntary Deferred Compensation Plan.

ARTICLE VI

DETERMINATION OF ANNUAL AWARD FUND

Section 6.01

The Annual Incentive Plan fund for each group shall be generated by a percent of the aggregate salaries for the individuals in each group. The target award fund shall be computed as shown in Table I below:

TABLE I

TARGET ANNUAL AWARD FUND

GROUP	AGGREGATE SALARIES	TARGET AWARD EXPRESSED AS A % OF SALARIES	TARGET ANNUAL AWARD FUND
I	$____________	X 10% =	$____________
II	$____________	X 9% =	$____________
III	$____________	X 8.5% =	$____________

Section 6.02

The actual amount of the Senior Management Incentive Compensation Plan award fund shall be calculated according to a schedule comparing Earnings Per Share and ROAA for the Award Period to a pre-determined performance standard. When performance is at or above the performance standard, the actual award fund is adjusted upward from the target award fund.

Section 6.03

There shall be a minimum acceptable performance beneath which no incentive awards are paid (sometimes referred to as the “threshold”) and a maximum above which there is no additional award paid to avoid excessive payout in the event of windfall profits. Said minimum and maximum shall be reviewed annually and amended when necessary in the sole discretion of the Compensation Committee.

Section 6.04

A Participant who is rated a "4" or "5" on the most recent Performance Appraisal and Development Plan shall not be eligible to receive an award under the Plan.

ARTICLE VII

CALCULATION OF AWARD

Section 7.01

The Corporation’s (Group I) will earn an award determined by Earnings Per Share, as shown below:

TABLE I

2007 ANNUAL CASH INCENTIVE COMPENSATION AWARD

INITIAL CALCULATION

Group I - Executive Committee of Community Trust Bancorp, Inc.

* Target/ROAA	Award As A % of Target Award	Award As A % of Salary
		Group I
ROAA
Base 1.27%	100%	10%
1.31%	200%	20%
1.35%	300%	30%
1.39%	400%	40%
1.43%+	600%	60%

·   For 2007, 100% of Targeted (Base) ROAA and $ 2.45 earnings per share is required for an incentive to be earned.

·   These results are after accrual of the incentive.

Section 7.02

The Corporation’s (Group II) will earn an award determined by Earnings Per Share, as shown below:

TABLE II

2007 ANNUAL CASH INCENTIVE COMPENSATION AWARD

INITIAL CALCULATION

Group II - Consolidated Division Officers of CTBI and Market Presidents

EPS as A % of * Target/ROAA	Award As A % of Target Award	Award As A % of Salary
		Group II
ROAA
Base1.27%	100%	9%
1.31%	133%	12%
1.35%	200%	18%
1.39%	275%	25%
1.43%+	333%	30%

·   For 2007, 100% of the targeted (Base) ROAA and $ 2.45 earnings per share is required for an incentive to be earned.

·   These results are after accrual of the incentive.

Section 7.03

Senior Vice Presidents of consolidated functions designated by the Compensation Committee will earn an award primarily determined by earnings per share, as shown below:

TABLE III

2007 ANNUAL CASH INCENTIVE COMPENSATION AWARD

INITIAL CALCULATION

Group III - Senior Vice Presidents of Consolidated Functions

EPS as A % of * Target/ROAA	Award As A % of Target Award	Award As A % of Salary
		Group V
ROAA
Base1.27%	100%	8.5%
1.31%	118%	10%
1.35%	176%	15%
1.39%	235%	20%
1.43%+	294%	25%

·   For 2007, 100% of the targeted (Base) ROAA and $2.45 earnings per share is required to earn an incentive.

·   These results are after accrual of the incentive.

Section 7.04

Participants in Groups I, II, and III shall be eligible to receive Stock Options awards on the same day that cash awards are paid under the terms of this Plan. Such Stock Options shall have a face value equal to the percentage of salary shown on Table IV below, adjusted in the same manner and in the same proportion as cash awards are adjusted under the terms of Sections 7.01, 7.02, and 7.03, and rounded down as necessary to grant an option for whole shares.

TABLE IV

2007 SENIOR MANAGEMENT INCENTIVE COMPENSATION PLAN

STOCK OPTION AWARDS

EPS as A % of * Target/ROAA	Stock Option Award As A % of Salary
	Group I	Group II	Group III
ROAA
Base 1.27%	100%	50%	25%
1.31%	125%	60%	30%
1.35%	150%	70%	35%
1.39%	175%	80%	40%
1.43%+	200%	100%	50%

·   For 2007, 100% of Targeted (Base) ROAA and $2.45 earnings per share is required for an incentive to be earned.

·   These results are after accrual of the incentive.

ARTICLE VIII

MISCELLANEOUS PROVISIONS

Section 8.01

If the financial performance of the Company for any Fiscal Year taken into account for determination of an award is found to be incorrect by the Company's independent certified public accountants and was more than the correct amount, there shall be no recourse by the Company against any person or estate. However, the Company shall have the right to correct such error by reducing by the excess amount any subsequent payments yet to be made under the Plan.

Section 8.02

The Compensation Committee may elect to remove unusual, extraordinary or non-recurring items from the calculation of the Earnings Per Share.

Section 8.03

The Company shall not merge into or consolidate with another entity or sell all or substantially all of its assets to another entity unless such other entity shall become obligated to perform the terms and conditions hereof relating to any awards already earned but not yet paid to the participant on his/her behalf.

ATTACHMENT A

NOTICE OF PARTICIPATION

is eligible for participation in the 2007 Plan Year for Community Trust Bancorp, Inc. Senior Management Incentive Compensation Plan, such participant being subject to all of the terms and conditions of said Plan.

Compensation Committee of the Board of Directors

BY: ___________________________________

Dated: ____________________

ATTACHMENT B

DESIGNATION OF BENEFICIARY

I,          , a participant in the Community Trust Bancorp, Inc. Senior Management Incentive Compensation Plan, name the following as my primary beneficiary under said Plan in the event of my death prior to receiving an award payable to me under said Plan.

Name:

Relationship:

Address:

If the primary beneficiary predeceases me, I designate the following persons as a contingent beneficiary, in the order shown, to receive an award payable to me under the Plan:

Name:

Relationship:

Address:

Name:

Relationship:

Address:

Name:

Relationship:

Address:

This supersedes any previous beneficiary designation made by me with respect to this Plan. However, any compensation covered by the Community Trust Bancorp, Inc. Voluntary Deferred Compensation Plan shall be governed by the Beneficiary Designation applicable to that Plan.

Date:

Signature of Participant:

EX-21

EXHIBIT 21

Subsidiaries of the Registrant

The Corporation had four subsidiaries as of January 1, 2007.

	Jurisdiction of Organization	Shares Owned by Corporation	Percent Voting Stock Held by Corporation
Community Trust Bank, Inc., Pikeville, Kentucky	Kentucky	285,000 Common	100%
Community Trust and Investment Company, Lexington, Kentucky	Kentucky	500 Common	100%
CTBI Preferred Capital Trust	Delaware	42,720 Common Trust Securities	100%
CTBI Preferred Capital Trust II	Delaware	77,320 Common Trust Securities	100%

EX-23.1

EXHIBIT 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in Registration Statement No. 333-74217 on Form S-8 of Community Trust Bancorp, Inc. (Corporation) of our reports dated March 9, 2007, relating to the consolidated financial statements of the Corporation and management’s report on the effectiveness of internal control over financial reporting, appearing in this Annual Report on Form 10-K of the Corporation for the year ended December 31, 2006.

/s/ BKD LLP

Louisville, Kentucky

March 9, 2007

EX-23.2

EXHIBIT 23.2

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in Registration Statement No. 333-74217 on Form S-8 of Community Trust Bancorp, Inc. (the “Corporation”) of our report dated March 9, 2006, relating to the consolidated financial statements of the Corporation, appearing in this Annual Report on Form 10-K of Community Trust Bancorp, Inc. for the year ended December 31, 2005.

/s/ Deloitte & Touche LLP

Louisville, Kentucky

March 9, 2007

EX-31.1

Exhibit 31.1

Certification of Principal Executive Officer

I, Jean R. Hale, Chairman, President, and Chief Executive Officer of the Corporation, certify that:

(1) I have reviewed this annual report on Form 10-K of Community Trust Bancorp, Inc.;

(2) Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

(3) Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operation and cash flows of the Corporation as of, and for, the periods presented in this report;

(4) The Corporation's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Corporation and have:

(a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Corporation, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) evaluated the effectiveness of the Corporation's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and

(d) disclosed in this report any change in the Corporation's internal control over financial reporting that occurred during the Corporation's most recent fiscal quarter (the Corporation's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonable likely to materially affect, the Corporation's internal control over financial reporting; and

(5) The Corporation's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Corporation's auditors and the audit committee of the Corporation's board of directors (or persons performing the equivalent functions):

(a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Corporation's ability to record, process, summarize and report financial information; and

(b) any fraud, whether or not material, that involves management or other employees who have a significant role in the Corporation's internal control over financial reporting.

/s/ Jean R. Hale

Jean R. Hale

Chairman, President and CEO

March 14, 2007

EX-31.2

Exhibit 31.2

Certification of Principal Financial Officer

I, Kevin J. Stumbo, Executive Vice President and Treasurer of the Corporation, certify that:

(1) I have reviewed this annual report on Form 10-K of Community Trust Bancorp, Inc.;

(2) Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

(3) Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operation and cash flows of the Corporation as of, and for, the periods presented in this report;

(4) The Corporation's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Corporation and have:

(a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Corporation, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) evaluated the effectiveness of the Corporation's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and

(d) disclosed in this report any change in the Corporation's internal control over financial reporting that occurred during the Corporation's most recent fiscal quarter (the Corporation's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonable likely to materially affect, the Corporation's internal control over financial reporting; and

(5) The Corporation's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Corporation's auditors and the audit committee of the Corporation's board of directors (or persons performing the equivalent functions):

(a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Corporation's ability to record, process, summarize and report financial information; and

(b) any fraud, whether or not material, that involves management or other employees who have a significant role in the Corporation's internal control over financial reporting.

/s/ Kevin J. Stumbo

Kevin J. Stumbo

Executive Vice President and Treasurer

March 14, 2007

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the annual report of Community Trust Bancorp, Inc. (the "Corporation") on Form 10-K for the period ended December 31, 2006 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Jean R. Hale, Chairman, President and Chief Executive Officer of the Corporation, certify, pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operation of the Corporation.

/s/ Jean R. Hale

Jean R. Hale

Chairman, President and CEO

March 14, 2007

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the annual report of Community Trust Bancorp, Inc. (the "Corporation") on Form 10-K for the period ended December 31, 2006 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Kevin J. Stumbo, Executive Vice President and Treasurer of the Corporation, certify, pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Corporation.

/s/ Kevin J. Stumbo

Kevin J. Stumbo

Executive Vice President and Treasurer

March 14, 2007