SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

[X]	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the quarterly period ended June 30, 2001
	Or
[ ]	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	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)

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 the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practical date.

Common stock - 11,422,011 shares outstanding at July 31, 2001

PART I - FINANCIAL INFORMATION

Item 1. Condensed Financial Statements

The accompanying information has not been audited by independent public accountants; however, in the opinion of management such information reflects all adjustments necessary for a fair presentation of the results for the interim period. All such adjustments are of a normal and recurring nature.

The accompanying financial statements are presented in accordance with the requirements of Form 10-Q and consequently do not include all of the disclosures normally required by accounting principles generally accepted in the United States of America or those normally made in the registrant's annual report on Form 10-K. Accordingly, the reader of the Form 10-Q should refer to the registrant's Form 10-K for the year ended December 31, 2000 for further information in this regard.

Condensed Consolidated Balance Sheets

(in thousands except per share data)			June 30 2001			December 31 2000
Assets:
Cash and due from banks		$		73,100	$		72,725
Federal funds sold				193,760			96,990
Securities available-for-sale at fair value
	(amortized cost of $231,720 and $236,252, respectively)			234,452			236,620
Securities held-to-maturity at amortized cost
	(fair value of $42,844 and $47,053, respectively)			42,529			48,976
Loans				1,755,941			1,694,525
	Allowance for loan losses			(24,499)			(25,886)
	Net loans			1,731,442			1,668,639
Premises and equipment, net				49,512			49,029
Excess of cost over net assets acquired
	(net of accumulated amortization of $16,888 and $15,096, respectively)			63,959			56,320
Other assets				31,275			32,676
	Total Assets	$		2,420,029	$		2,261,975
Liabilities and Shareholders' Equity:
Deposits
	Noninterest bearing	$		274,977	$		254,642
	Interest bearing			1,808,941			1,689,274
Total deposits				2,083,918			1,943,916
Federal funds purchased and other short-term borrowings				69,915			58,951
Advances from Federal Home Loan Bank				11,453			13,326
Long-term debt				47,965			48,060
Other liabilities				21,288			15,818
	Total Liabilities			2,234,539			2,080,071
Shareholders' Equity:
Preferred stock, 300,000 shares authorized and unissued
Common stock, $5 par value, shares authorized 25,000,000;
	shares outstanding 2001 - 11,445,301; 2000 - 11,700,895			57,227			58,352
Capital surplus				51,547			54,892
Retained earnings				74,939			68,421
Accumulated other comprehensive income (loss), net of tax				1,777			239
	Total Shareholders' Equity			185,490			181,904
	Total Liabilities and Shareholders' Equity	$		2,420,029	$		2,261,975

Condensed Consolidated Statements of Income

		Three months ended				Six months ended
		June 30				June 30
(in thousands except per share data)		2001		2000		2001		2000
Interest Income:
Interest and fees on loans		$	38,917	$	38,429	$	79,485	$	75,413
Interest and dividends on securities
	Taxable		3,379		3,782		6,876		7,862
	Tax exempt		715		695		1,444		1,387
Other, including interest on fed funds sold			2,246		253		4,133		472
	Total Interest Income		45,257		43,159		91,938		85,134
Interest Expense:
Interest on deposits			23,090		19,909		46,725		38,695
Interest on federal funds purchased and other short-term borrowings			942		630		1,922		1,290
Interest on advances from Federal Home Loan Bank			168		223		350		458
Interest on long-term debt			1,065		1,173		2,136		2,348
	Total Interest Expense		25,265		21,935		51,133		42,791
	Net interest income		19,992		21,224		40,805		42,343
Provision for loan and lease losses			1,842		1,700		3,917		4,150
	Net interest income after provision for loan losses		18,150		19,524		36,888		38,193
Noninterest Income:
Service charges on deposit accounts			2,900		2,432		5,373		4,773
Gains on sales of loans, net			657		132		1,030		265
Trust income			683		568		1,283		1,132
Securities gains, net			637		0		637		0
Other			1,954		1,484		3,778		3,098
	Total Noninterest Income		6,831		4,616		12,101		9,268
Noninterest Expense:
Salaries and employee benefits			7,801		7,391		15,634		15,145
Occupancy, net			1,325		1,315		2,713		2,678
Equipment			970		1,091		1,927		2,151
Data processing			1,042		921		1,988		1,842
Stationery, printing, and office supplies			368		204		747		613
Taxes other than payroll, property, and income			539		545		1,096		988
FDIC insurance			104		95		196		190
Other			4,100		3,948		8,279		7,752
	Total Noninterest Expense		16,249		15,510		32,580		31,359
	Income before income taxes		8,732		8,630		16,409		16,102
Income taxes			2,818		2,821		5,253		5,174
	Net Income		5,914		5,809		11,156		10,928
Other comprehensive income, net of tax:
	Unrealized holding gains (losses) arising during period		(514)		428		1,538		165
Comprehensive income		$	5,400	$	6,237	$	12,694	$	11,093
Basic earnings per share		$	0.51	$	0.48	$	0.96	$	0.90
Diluted earnings per share		$	0.51	$	0.48	$	0.96	$	0.90
Average shares outstanding			11,558		12,124		11,613		12,131

Condensed Consolidated Statements of Cash Flows

			Six months ended
			June 30
(in thousands except per share data)			2001		2000
Cash flows from operating activities:
Net income			$	11,156	$	10,928
Adjustments to reconcile net income to net cash provided by operating activities:
	Depreciation and amortization			3,791		3,598
	Net change in net deferred tax asset			(2,420)		0
	Provision for loan and other real estate losses			4,079		4,217
	Securities gains, net			(637)		0
	Gains on sale of mortgage loans held for sale			(657)		(265)
	(Gains) or losses on sale of assets, net			(6)		201
	Proceeds from sale of mortgage loans held for sale			48,037		11,704
	Net amortization (accretion) of securities premiums			(128)		158
	Net change in mortgage loans held for sale			(323)		340
	Changes in:
		Other liabilities		5,469		6,070
		Other assets		512		667
	Net cash provided by operating activities			68,873		25,914
Cash flows from investing activities:
Securities available-for-sale (AFS):
	Proceeds from sales			20,800		68
	Proceeds from prepayments and maturities			53,217		36,617
	Purchase of AFS securities			(68,712)		(9,620)
Securities held-to-maturity (HTM):
	Proceeds from prepayments and maturities			6,439		6,649
	Purchase of HTM securities			0		(390)
Net change in loans				(115,536)		(73,387)
Purchase of premises, equipment, and other real estate				(2,654)		(731)
Proceeds from sale of premises and equipment				179		586
Proceeds from sale of other real estate				4,080		894
Cash provided from net liabilities acquired				(9,431)		0
	Net cash (provided by) used in investing activities			(111,618)		27,610
Cash flows from financing activities:
Net change in deposits				140,002		(7,523)
Net change in federal funds purchased and other short-term borrowings				10,964		337
Advances from Federal Home Loan Bank				0		89
Payments on advances from Federal Home Loan Bank				(1,872)		(1,829)
Payments on long-term debt				(95)		(96)
Issuance of common stock				1,202		341
Repurchase of common stock				(5,674)		(3,580)
Dividends paid				(4,637)		(4,525)
	Net cash provided by (used in) financing activities			139,890		(16,786)
Net increase (decrease) in cash and cash equivalents				97,145		(18,482)
Cash and cash equivalents at beginning of year				169,715		107,457
	Cash and cash equivalents at end of period		$	266,860	$	88,975

Notes to Condensed Consolidated Financial Statements

Note 1 - Summary of Significant Accounting Policies

In the opinion of management, the unaudited condensed consolidated financial statements include all adjustments (which consist of normal recurring accruals) necessary, to present fairly the consolidated financial position as of June 30, 2001, the results of operations for the three and six months ended June 30, 2001 and 2000 and the statements of cash flows for the six months ended June 30, 2001 and 2000. In accordance with accounting principles generally accepted in the United States of America for interim financial information, these statements do not include certain information and footnote disclosures required by accounting principles generally accepted in the United States of America for complete annual financial statements. Financial information as of December 31, 2000 has been derived from the audited Consolidated Financial Statements of Community Trust Bancorp, Inc. (the "Registrant" or "Corporation"). The results of operations for the three and six months ended June 30, 2001 and 2000 and statements of cash flows for the six months ended June 30, 2001 and 2000 are not necessarily indicative of the results to be expected for the full year. For further information, refer to the Consolidated Financial Statements and footnotes thereto for the year ended December 31, 2000, included in the Registrant's Annual Report on Form 10-K.

Principles of Consolidation - The unaudited condensed consolidated financial statements include the accounts of the Corporation and its separate and distinct, wholly owned subsidiaries Community Trust Bank, National Association; Trust Company of Kentucky, National Association; CTBI Preferred Capital Trust; and Community Trust Funding Corporation. All significant intercompany transactions have been eliminated in consolidation.

On January 1, 2001, the Corporation adopted Statement of Financial Accounting Standard (SFAS) No. 133, Accounting for Derivative Instruments and Certain Hedging Activities, as amended by SFAS No. 138, Accounting for Certain Derivative Instruments and Certain Hedging Activities. SFAS No. 133 establishes accounting and reporting standards for derivative instruments and for hedging activities. It requires that all derivatives, including those embedded in other contracts, be recognized as either assets or liabilities and that those financial instruments be measured at fair value. The accounting for changes in the fair value of derivatives depends on their intended use and designation. Management has reviewed the requirements of SFAS No. 133 and has determined that the Corporation has no freestanding or embedded derivatives. All contracts that contain provisions meeting the definition of a derivative also meet the requirements of, and have been designated as, normal purchases or sales. The Corporation's policy is to not use freestanding derivatives and to not enter into contracts with terms that cannot be designated as normal purchases or sales. This statement did not impact the Corporation's financial position or results of operation.

In July 2001, the Financial Accounting Standards Board issued Statement No. 141, Business Combinations, and Statement No. 142, Goodwill and Other Intangible Assets. Statement 141 requires that the purchase method of accounting be used for all business combinations initiated after June 30, 2001. Statement 141 also specifies criteria intangible assets acquired in a purchase method business combination must meet to be recognized and reported apart from goodwill. Statement 142 will require that goodwill and intangible assets with indefinite useful lives no longer be amortized, but instead tested for impairment at least annually in accordance with the provisions of Statement 142. Statement 142 will also require that intangible assets with definite useful lives be amortized over their respective estimated useful lives to their estimated residual values and reviewed for impairment in accordance with SFAS No. 121, Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of.

The Corporation is required to adopt the provisions of Statement 141 immediately and Statement 142 effective January 1, 2002. Furthermore, any goodwill and any intangible assets determined to have an indefinite useful life that are acquired in a purchase business combination completed after June 30, 2001 will not be amortized, but will continue to be evaluated for impairment in accordance with the appropriate pre-Statement 142 literature. Goodwill and intangible assets acquired in business combinations completed before July 1, 2001 will continue to be amortized prior to the adoption of Statement 142.

Once adopted, the Corporation expects to have unamortized goodwill in the amount of $57.1 million and amortization expense related to goodwill of approximately $3 million on an annualized basis will cease. The Corporation is evaluating the impact of the adoption of these standards and has not yet determined the effect of adoption on its financial position and results of operations, including whether any impairment charges will result.

Note 2 - Business Combinations

On January 26, 2001, Community Trust Bank, N.A. acquired certain deposits, loans, and fixed assets of The Bank of Mt.Vernon, Inc. The offices acquired had deposits totaling $109.3 million and loans totaling $79 million. The addition of banking offices in Mt. Vernon, Somerset, Richmond, and Berea, Kentucky represents an in-market acquisition and should provide the corresponding synergies normally associated with this type of acquisition.

Note 3 - Securities

Securities are classified into held-to-maturity and available-for-sale categories. Held-to-maturity securities are those that the Corporation has the positive intent and ability to hold to maturity and are reported at amortized cost. Available-for-sale securities are those that the Corporation may decide to sell if needed for liquidity, asset-liability management or other reasons. Available-for-sale securities are reported at fair value, with unrealized gains or losses included as a separate component of equity, net of tax.

The amortized cost and fair value of securities available-for-sale as of June 30, 2001 are summarized as follows:

(in thousands)			Amortized Cost			Fair Value
U.S. Treasury and Government agencies		$		34,908	$		35,286
States and political subdivisions				34,576			35,356
Mortgage-backed pass through certificates				115,514			116,894
Collateralized mortgage obligations				12,396			12,540
Other debt securities				6,964			7,063
	Total debt securities			204,358			207,139
Equity securities				27,362			27,313
	Total Securities	$		231,720	$		234,452

The amortized cost and fair value of securities held-to-maturity as of June 30, 2001 are summarized as follows:

(in thousands)			Amortized Cost			Fair Value
U.S. Treasury and Government agencies		$		11,499	$		11,094
States and political subdivisions				24,348			25,045
Mortgage-backed pass through certificates				4,350			4,375
Collateralized mortgage obligations				2,332			2,330
	Total Securities	$		42,529	$		42,844

The amortized cost and fair value of securities available-for-sale as of December 31, 2000 are summarized as follows:

(in thousands)			Amortized Cost			Fair Value
U.S. Treasury and Government agencies		$		28,464	$		28,918
States and political subdivisions				33,799			34,037
Mortgage-backed pass through certificates				117,085			116,829
Collateralized mortgage obligations				15,105			15,102
Other debt securities				35,351			35,327
	Total debt securities			229,804			230,213
Equity securities				6,448			6,407
	Total Securities	$		236,252	$		236,620

The amortized cost and fair value of securities held-to-maturity as of December 31, 2000 are summarized as follows:

(in thousands)			Amortized Cost			Fair Value
U.S. Treasury and Government agencies		$		11,499	$		9,168
States and political subdivisions				27,653			28,123
Mortgage-backed pass through certificates				6,545			6,505
Collateralized mortgage obligations				3,279			3,257
	Total Securities	$		48,976	$		47,053

Note 4 - Loans

Major classifications of loans are summarized as follows:

(in thousands)			June 30 2001			December 31 2000
Commercial, secured by real estate		$		494,501	$		469,646
Commercial, other				310,951			303,141
Real estate - commercial construction				78,191			78,487
Real estate - residential construction				19,368			14,704
Real estate mortgage				443,637			435,110
Consumer				402,019			386,504
Equipment lease financing				7,274			6,933
	Total loans	$		1,755,941	$		1,694,525

Note 5 - Borrowings

Short-term debt consists of the following:

(in thousands)			June 30 2001			December 31 2000
Parent Company:
	Revolving line of credit, 6.125% interest due semiannually. The Corporation has a $14 million revolving line of credit; $8.5 million is currently available to meet any future cash needs, expires January 31, 2002.	$		5,500	$		5,500
Subsidiaries:
	Federal funds purchased			19,740			13,833
	Securities sold under agreements to repurchase			44,675			39,618
	Total short-term debt	$		69,915	$		58,951

Generally, federal funds purchased and securities purchased under agreements to resale mature and reprice daily. The average rates paid for federal funds purchased and repurchase agreements as of June 30, 2001 were 3.95% and 3.89%, respectively.

Long-term debt consists of the following:

(in thousands)			June 30 2001			December 31 2000
Parent Company:
	Ten Year Senior Notes, 8.25% interest, due January 1, 2003; interest payable semiannually; redeemable in whole or in part at the option of the Corporation	$		12,230	$		12,230
Subsidiaries:
	Trust Preferred Securities, 9.0% interest, due March 31, 2027; irrevocably and unconditionally guaranteed by the Corporation and subordinate and junior in right of payment to all senior debt. There are no payments due on this debt until maturity on March 31, 2027.			34,500			34,500
	Capital lease obligations, interest at lender's prime rate, payable in quarterly principal and interest installments of $53 thousand, adjusted for prime rate changes through September 2004, secured by real property. The Bank has a purchase option in September 2004 for $921 thousand or a renewal option for five years.			1,233			1,291
Other				2			39
	Total long-term debt	$		47,965	$		48,060

Item 2. Management's Discussion and Analysis of Financial Condition

and Results of Operations

Overview

Community Trust Bancorp, Inc. (the "Corporation") is a multi-bank holding company headquartered in Pikeville, Kentucky. At June 30, 2001, the Corporation owned one commercial bank and one trust company. Through its subsidiaries, the Corporation has sixty-seven banking locations serving 272,000 households in Eastern and Central Kentucky and West Virginia. The Corporation had total assets of $2.4 billion and total shareholders' equity of $185 million as of June 30, 2001. The Corporation's common stock is listed on NASDAQ under the symbol CTBI. Market makers are Herzog, Heine, Geduld, Inc., New York, New York; J.J.B. Hilliard, W.L. Lyons, Inc., Louisville, Kentucky; Morgan, Keegan and Company, Inc., Memphis, Tennessee; Keefe, Bruyette & Woods, Inc., New York, New York; Sandler O'Neill & Partners, New York, New York; Sherwood Securities Corp., New York, New York; Spear, Leeds & Kellogg, New York, New York.

Dividends

Regular quarterly cash dividends were paid on (1) April 1, 2000 of 18 cents per share for shareholders of record on March 15, 2000, (2) July 1, 2000 of 19 cents per share for shareholders of record on June 15, 2000, (3) October 1, 2000 of 19 cents per share for shareholders of record on September 15, 2000, (4) January 1, 2001 of 19 cents per share for shareholders of record on December 15, 2000, (5) April 1, 2001 of 20 cents per share for shareholders of record on March 15, 2001, and (6) July 1, 2001 of 20 cents per share for shareholders of record on June 15, 2001.

Mergers and Acquisitions

On January 26, 2001, Community Trust Bank, N.A. acquired certain deposits, loans, and fixed assets of The Bank of Mt.Vernon, Inc. The offices acquired had deposits totaling $109.3 million and loans totaling $79 million. The addition of banking offices in Mt. Vernon, Somerset, Richmond, and Berea, Kentucky represents an in-market acquisition and should provide the corresponding synergies normally associated with this type of acquisition.

Income Statement Review

The Corporation's net income for the three months ended June 30, 2001 was $5.9 million or $0.51 per share as compared to $5.8 million or $0.48 per share for the three months ended June 30, 2000. Net income for the six months ended June 30, 2001 was $11.2 million or $0.96 per share as compared to $10.9 million or $0.90 per share for the six months ended June 30, 2000. The Corporation had average shares outstanding of 11,613,000 and 12,131,000 for the six months ended June 30, 2001 and June 30, 2000, respectively. The following table sets forth on an annualized basis the return on average assets and return on average shareholders' equity for the three and six month periods ending June 30, 2001 and 2000:

	Three months ended				Six months ended
	June 30				June 30
	2001		2000		2001		2000
Return on average shareholders' equity	12.74	%	13.20	%	12.12	%	12.52	%
Return on average assets	0.97	%	1.08	%	0.94	%	1.02	%

The Corporation's net income for the second quarter of 2001 represents a 3 cents per share increase in earnings compared to the same period last year. The increase in earnings per share is primarily attributable to the reduction in common shares outstanding resulting from the Corporation's stock repurchase program.

Net Interest Income

Net interest income decreased $1.2 million or (5.8%) from $21.2 million for the second quarter of 2000 to $20.0 million for the second quarter of 2001. Interest income increased $2.1 million or 4.9% for the quarter ending June 30, 2001 as compared to the same period in 2000, while interest expense increased $3.3 million or 15.2%.

As was anticipated when the economy began to weaken during 2000 and interest rates began to decline in January 2001, CTBI's net interest margin continues to be negatively impacted by the repricing of assets quicker than liabilities. Although market interest rates have declined 275 basis points since January 1, 2001, our net interest margin has declined only 80 basis points from 4.45% on June 30, 2000 to 3.65% on June 30, 2001. Some of the pressure on our net interest margin has been offset by a 156 basis point increase in our average earning assets as a percentage of total assets which were 92.42% on June 30, 2001 compared to 90.86% at June 30, 2000. Current economic conditions are expected to continue to place pressure on our net interest margin in the near term due to continued repricing of assets and liabilities, our growth in deposits during a period of weak commercial loan demand, and the lack of alternative higher yielding investments for placing those funds other than loans.

The Corporation's assets grew 11.19% from June 30, 2000 to June 30, 2001 increasing from $2.176 billion to $2.420 billion. The loan portfolio grew 4.8% to $1.76 billion from the $1.68 billion of June 30, 2000. Total deposits grew 11.45% to $2.084 billion from the $1.870 billion of June 30, 2000. Almost all of the loan growth and approximately 50% of the deposit growth resulted from the Bank of Mt.Vernon, Inc. transaction that closed on January 26, 2001 with the remainder being internal growth. The impact of current economic conditions on the Corporation's balance sheet is evidenced by the small loan growth resulting from a significant softening in commercial loan demand and the migration of portfolio residential real estate loans to long term fixed rate secondary market loans, while internal growth in interest bearing deposits has been strong. Our net interest margin has been adversely impacted as current market conditions provide limited higher yielding investment opportunities other than loans.

The following table summarizes the annualized net interest spread and net interest margin for the three and six months ended June 30, 2001 and 2000.

			Three months ended						Six months ended
			June 30						June 30
		2001				2000			2001			2000
Yield on interest earning assets	8.14			%	8.90		%	8.44		%	8.79		%
Cost of interest bearing funds	5.16			%	5.10		%	5.32		%	4.98		%
Net interest spread	2.98			%	3.80		%	3.12		%	3.81		%
Net interest margin	3.65			%	4.45		%	3.80		%	4.45		%

Provision for Loan Losses

The analysis of the changes in the allowance for loan losses and selected ratios is set forth below:

			Six months ended
			June 30
(in thousands)			2001		2000
Allowance balance at January 1		$		25,886	$	25,102
	Additions to allowance charged against operations			3,917		4,150
	Recoveries credited to allowance			2,073		3,071
	Losses charged against allowance			(7,377)		(6,617)
Allowance balance at June 30		$		24,499	$	25,706
Allowance for loan losses to period-end loans		1.40			%	1.53	%
Average loans, net of unearned income		$		1,756,693	$	1,641,606
Provision for loan losses to average loans, annualized		0.45			%	0.51	%
Loan charge-offs net of recoveries, to average loans, annualized		0.61			%	0.43	%

During the second quarter 2001, the Corporation took a $2.25 million charge to the specific reserve established for the large commercial credit referenced as previously disclosed. As a result, net charge-offs for the six months ending June 30, 2001 were $5.3 million, a 49.6% increase from the $3.5 million experienced during the first half of 2000. Our reserve for losses on loans and leases as a percentage of loans was 1.40% on June 30, 2001 compared to 1.53% on June 30, 2000. The decline in loan loss reserve as a percentage of average loans is primarily the result of the addition of $79 million in loans from the Mt. Vernon acquisition and the charge to the specific reserve mentioned above. Since the terms of the Mt. Vernon acquisition provided for due diligence and put back of substandard loans to the seller, no increase in the allowance was booked and charged to current provision expense impacting the reserve for losses on loans to total loans by 6 basis points.

Net charge-offs represent the amount of loans charged off less the amounts recovered on loans previously charged off. Net charge-offs as a percentage of average loans outstanding increased 18 basis points to 0.61% for the six months ended June 30, 2001 as compared to the same period in 2000. The Corporation's non-performing loans (90 days or more past due and non-accrual) were 1.41% and 1.52% of outstanding loans at June 30, 2001 and December 31, 2000, respectively.

Any loans classified as loss, doubtful, substandard or special mention that are not included in non-performing loans do not (i) represent or result from trends or uncertainties which management reasonably expects will materially impact future operating results, liquidity or capital resources or (ii) represent material credits about which management has knowledge of any information which would cause management to have serious doubts as to the ability of the borrowers to comply with the loan repayment terms. The Corporation does not believe there are currently any trends, events, or uncertainties that are reasonably likely to have a material effect on the volume of its non-performing loans, except the Bank currently has a $15 million loan secured by the stock of a bank which has an agreement for sale pending regulatory approval. The borrower has indicated the possible inability to pay interest on the loan at its maturity on August 31, 2001 creating an uncertain event regarding future non-performing loans. Based upon current information, the Corporation does not anticipate a material loss from this loan.

Noninterest Income

Noninterest income for the quarter ending June 30, 2001 of $6.8 million was a 48% increase from the $4.6 million earned during the same period in 2000. The increase in noninterest income is primarily the result of securities gains of $0.6 million, an increase in the gains on sale of residential real estate loans due to current refinancing activity of $0.5 million, and an increase in deposit account fees of $0.5 million. The increase in deposit related fees is primarily the result of the acquired Mt. Vernon deposits and a 25% increase in overdraft fees implemented in February of 2001.

Noninterest Expense

Noninterest expense was $16.2 million for the quarter ending June 30, 2001, a 4.8% increase from the $15.5 million for quarter ending June 30, 2000. The increase in noninterest expense is primarily attributable to the operating expenses associated with the addition of the five banking offices acquired from The Bank of Mount Vernon, Inc. on January 26, 2001. The additional expenses are also reflected in our efficiency ratio, which increased 203 basis points from 58.87% at June 30, 2000 to 60.90% for the current quarter. Management expects the efficiency ratio to continue to show improvement during the remainder of 2001 as the ratio decreased 50 basis points during the second quarter of 2001.

Cash Basis Income

			Three months ended
			June 30
						Amortization
(in thousands)			Reported Earnings			Goodwill			Core Deposit Intangible			"Cash" Earnings
Income before income tax expense		$		8,732	$		779	$		145	$		9,656
	Income taxes			2,818			205			51			3,074
Net income		$		5,914	$		574	$		94	$		6,582

			Six months ended
			June 30
						Amortization
(in thousands)			Reported Earnings			Goodwill			Core Deposit Intangible			"Cash" Earnings
Income before income tax expense		$		16,409	$		1,502	$		290	$		18,201
	Income taxes			5,253			390			102			5,745
Net income		$		11,156	$		1,112	$		188	$		12,456

These calculations were specifically formulated by the Corporation and may not be comparable to similarly titled measures reported by other companies.

Balance Sheet Review

Total asset size grew 7.0% to $2.42 billion at June 30, 2001 from $2.26 billion at December 31, 2000. The Corporation's largest liability, deposits, increased 7.2% from $1.94 billion as of December 31, 2000 to $2.08 billion as of June 30, 2001. Noninterest bearing deposits increased from $255 million at December 31, 2000 to $275 million at June 30, 2001. Interest bearing deposits increased from $1.69 billion at December 31, 2000 to $1.81 billion at June 30, 2001. Approximately 78% of the deposit growth resulted from the Bank of Mt.Vernon, Inc. transaction that closed on January 26, 2001 with the remainder being internal growth.

Loans

The loan portfolio grew at an annualized rate of 7.3% to $1.76 billion from the $1.69 billion at December 31, 2000. All of the loan growth resulted from the Bank of Mt.Vernon, Inc. transaction that closed on January 26, 2001. The impact of current economic conditions on the Corporation's balance sheet is evidenced by the small loan growth resulting from a significant softening in commercial loan demand and the migration of portfolio residential real estate loans to long term fixed rate secondary market loans. Our net interest margin has been adversely impacted as current market conditions provide limited higher yielding investment opportunities other than loans.

Foreclosed properties on June 30, 200l were $1.9 million, a decline of $2.7 million or 58.7% from the $4.6 million reported at December 31, 2000. The reduction from the December 31, 2000 total is primarily the result of the successful liquidation, as was anticipated, of one commercial property during June 2001 at no additional loss.

Loans on non-accrual or 90 days past due amounted to 1.41% of total loans outstanding as of June 30, 2001 and 1.52% of total loans outstanding as of December 31, 2000. The decline in non-accrual loans was primarily the result of a $2.25 million charge to the specific reserve established for the large commercial credit referenced in our last 10-Q filing. Specific reserves are established for all large loans where a loss may occur; therefore, no significant losses are anticipated except for those loans with specific reserve allocations.

The allowance for loan losses decreased from 1.53% of total loans outstanding as of December 31, 2000 to 1.40% as of June 30, 2001. The decline in loan loss reserve as a percentage of average loans is primarily the result of the addition of $79 million in loans from the Mt. Vernon acquisition and the charge to the specific reserve mentioned above. Since the terms of the Mt. Vernon acquisition provided for due diligence and put back of substandard loans to the seller, no increase in the allowance was booked and charged to current provision expense impacting the reserve for losses on loans to total loans by 6 basis points. The allowance for loan losses as a percentage of non-performing loans was 100.6% at December 31, 2000 and 99.3% at June 30, 2001.

The following table summarizes the Corporation's loans that are non-accrual or past due 90 days or more as of June 30, 2001 and December 31, 2000.

(in thousands)			Non-accrual loans			As a % of loan balances by category			Accruing loans past due 90 days or more			As a % of loan balances by category
June 30, 2001
Commercial loans secured by real estate		$		6,219	1.09		%	$		1,037	0.18		%
Commercial loans, other				6,487	2.04					546	0.17
Consumer loans secured by real estate				7,342	1.59					1,453	0.31
Consumer loans, other				356	0.09					1,233	0.31
	Total	$		20,404	1.16		%	$		4,269	0.24		%

December 31, 2000
Commercial loans secured by real estate		$	7,646	1.39	%	$	463	0.08	%
Commercial loans, other			7,322	2.36			66	0.02
Consumer loans secured by real estate			7,589	1.69			1,550	0.34
Consumer loans, other			174	0.05			921	0.24
	Total	$	22,731	1.34	%	$	3,000	0.18	%

Allowance for loan losses

Management analyzes the adequacy of its allowance for loan losses on a quarterly basis. The loan portfolio of each market region is analyzed by each major loan category, with a review of the following areas: (i) specific allocations based upon a review of selected loans for loss potential; (ii) an allocation which estimates reserves based upon the remaining pool of loans in each category derived from historical net charge-off data; and (iii) an unallocated portion of the allowance using delinquency trends and other relevant factors which provides for a margin of error in estimating the allocations described above and provides for risks inherent in the portfolio which may not be specifically addressed elsewhere.

Off-balance sheet risk is addressed by including letters of credit in the Corporation's allowance adequacy analysis and through a monthly review of all letters of credit outstanding. The Corporation's loan review and problem loan analysis includes evaluation of deteriorating letters of credit. Volume and trends in delinquencies are monitored monthly by management and the boards of directors of the Bank and the Corporation quarterly.

Securities

The Corporation uses its securities held-to-maturity for production of income and to manage cash flow needs through expected maturities. The Corporation uses its securities available-for-sale for income and balance sheet liquidity management. The book value of securities available-for-sale decreased from $237 million as of December 31, 2000 to $234 million as of June 30, 2001. Securities held-to-maturity declined from $49 million to $43 million during the same period. Total securities as a percentage of total assets were 12.6% as of December 31, 2000 and 11.4% as of June 30, 2001.

Liquidity and Capital Resources

The Corporation's liquidity objectives are to ensure that funds are available for the subsidiary bank to meet deposit withdrawals and credit demands without unduly penalizing profitability, and to ensure that funding is available for the Corporation to meet ongoing cash needs while maximizing profitability. The Corporation continues to identify ways to provide for liquidity on both a current and long-term basis. The subsidiary bank relies mainly on core deposits, certificates of deposits of $100,000 or more, repayment of principal and interest on loans and securities and federal funds sold and purchased to create long-term liquidity. The subsidiary bank also relies on the sale of securities under repurchase agreements, securities available-for-sale and Federal Home Loan Bank borrowings.

Due to the nature of the markets served by the subsidiary banks, management believes that the majority of its certificates of deposits of $100,000 or more are no more volatile than its core deposits. During periods of interest rate volatility, these deposit balances have remained stable as a percentage of total deposits. In addition, arrangements have been made with correspondent banks for the purchase of federal funds on an unsecured basis, up to an aggregate of nearly $100 million, if necessary, to meet the Corporation's liquidity needs.

The Corporation owns $234 million of securities valued at market price that are designated as available-for-sale and available to meet liquidity needs on a continuing basis. The Corporation also relies on Federal Home Loan Bank advances for both liquidity and management of its asset/liability position. Federal Home Loan Bank advances decreased from $13.3 million as of December 31, 2000 to $11.5 million as of June 30, 2001.

The Corporation generally relies upon net inflows of cash from financing activities, supplemented by net inflows of cash from operating activities, to provide cash for its investing activities. As is typical of many financial institutions, significant financing activities include deposit gathering, use of short-term borrowing facilities such as federal funds purchased and securities sold under repurchase agreements, and issuance of long-term debt. The Corporation currently has a $14 million revolving line of credit; $8.5 million is currently available to meet any future cash needs. The Corporation's primary investing activities include purchases of securities and loan originations.

During the second quarter of 2001, the Corporation continued its stock repurchase program, acquiring 184,947 shares of the Corporation's stock. The Corporation's stock repurchase program continues to be accretive to shareholder value. The Corporation began a program of stock repurchase in December 1998 with the authorization to acquire up to 500,000 shares. The Corporation issued a press release in July 2000 announcing its intention to repurchase up to an additional 1,000,000 shares.

In conjunction with maintaining a satisfactory level of liquidity, management monitors the degree of interest rate risk assumed on the balance sheet. The Corporation monitors its interest rate risk by use of the static gap model and dynamic gap model at the one-year interval. The static gap model monitors the difference in interest rate sensitive assets and interest rate sensitive liabilities as a percentage of total assets that mature within the specified time frame. The dynamic gap model goes further in that it assumes that interest rate sensitive assets and liabilities will be reinvested. The Corporation uses the Sendero system to monitor its interest rate risk. The Corporation desires an interest sensitivity gap of not more than fifteen percent of total assets at the one-year interval.

The Corporation's principal source of funds used to pay dividends to shareholders and service long-term debt is the dividends it receives from the subsidiary bank. Various federal statutory provisions, in addition to regulatory policies and directives, limit the amount of dividends that subsidiary banks can pay without prior regulatory approval. These restrictions have had no major impact on the Corporation's dividend policy or its ability to service long-term debt, nor is it anticipated that they would have any major impact in the foreseeable future. During 2001, approximately $22.1 million plus any 2001 net profits can be paid by the Corporation's banking subsidiary without prior regulatory approval.

The primary source of capital for the Corporation is retained earnings. The Corporation paid cash dividends of $0.40 per share for the first six months of 2001 and $0.37 per share for the first six months of 2000. Earnings per share for the same periods were $0.96 and $0.90, respectively. The Corporation retained 58% of earnings for the first six months of 2001.

Under guidelines issued by banking regulators, the Corporation and its subsidiary bank are required to maintain a minimum Tier 1 risk-based capital ratio of 4% and a minimum total risk-based ratio of 8%. Risk-based capital ratios weight the relative risk factors of all assets and consider the risk associated with off-balance sheet items. The Corporation must also maintain a minimum Tier 1 leverage ratio of 4%. The Corporation's Tier 1 leverage, Tier 1 risk-based, and total risk-based ratios were 6.48%, 8.71%, and 9.96%, respectively as of June 30, 2001.

As of June 30, 2001, management is not aware of any current recommendations by banking regulatory authorities which, if they were to be implemented, would have, or would be reasonably likely to have, a material adverse impact on the Corporation's liquidity, capital resources, or operations.

Impact of Inflation and Changing Prices

The majority of the Corporation's assets and liabilities are monetary in nature. Therefore, the Corporation differs greatly from most commercial and industrial companies that have significant investment in nonmonetary 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.

Management believes the most significant impact on financial and operating results is the Corporation's ability to react to changes in interest rates. Management seeks to maintain an essentially balanced position between interest rate sensitive assets and liabilities in order to protect against the effects of wide interest rate fluctuations.

FORWARD-LOOKING STATEMENTS

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, the performance of coal and coal related industries, 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, of changes in laws and regulations on competition and of demographic changes on target market populations' savings and financial planning needs; the adoption by the Corporation of an 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 Office of the Comptroller of Currency, 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 3. Quantitative and Qualitative Disclosures About Market Risk

The Corporation currently does not engage in any derivative or hedging activity. Refer to the Corporation's 2000 Form 10-K for analysis of the interest rate sensitivity.

PART II - OTHER INFORMATION

Item 1.	Legal Proceedings	None
Item 2.	Changes in Securities	None
Item 3.	Defaults Upon Senior Securities	None
Item 4.	Submission of Matters to a Vote of Security Holders

The Corporation's Annual Meeting of Shareholders was held on April 24, 2001. The following items were approved:

1) Election of the following members to the Corporation's Board of Directors for the ensuing year.

Nominee	In Favor		Withheld
Charles J. Baird		8,662,799		25,609
Burlin Coleman		8,676,991		11,417
Nick A. Cooley		8,681,797		6,611
William A. Graham, Jr.		8,680,512		7,896
Jean R. Hale		8,669,381		18,878
M. Lynn Parrish		8,685,063		3,196
Ernest M. Rogers		8,683,477		4,931

2) Ratification of Deloitte & Touche, LLP as the Corporation's independent certified public accountants for 2001.

The votes of the shareholders on this item were as follows:

In Favor	Withheld			Abstained
8,769,895		12,692	57,655

Item 5.	Other Information	None
Item 6.	Exhibits and Reports on Form 8-K	None

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Corporation has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	COMMUNITY TRUST BANCORP, INC.
	By:
Date: August 14, 2001	/s/ Jean R. Hale
	Jean R. Hale
	Vice Chairman, President, and
	Chief Executive Officer
	/s/ Kevin Stumbo
	Kevin Stumbo
	Chief Accounting Officer