(in thousands)	September 30 2011		December 31 2010
Commercial construction	$	121,142	$	135,091
Commercial secured by real estate		806,178		807,049
Equipment lease financing		10,765		14,151
Commercial other		376,890		388,746
Real estate construction		50,450		56,910
Real estate mortgage		644,779		623,851
Home equity		84,173		85,103
Consumer direct		124,441		126,046
Consumer indirect		354,739		368,233
Total loans	$	2,573,557	$	2,605,180

Not included in the loan balances above were loans held for sale in the amount of $0.8 million and $0.5 million at September 30, 2011 and December 31, 2010, respectively. The amount of capitalized fees and costs related to origination of loans under ASC 310-20, included in the above loan totals were $0.9 million and $0.8 million at September 30, 2011 and December 31, 2010, respectively.

CTBI acquired loans through the acquisition of First National Bank of LaFollette in the fourth quarter 2010. At acquisition, the transferred loans with evidence of deterioration of credit quality since origination were not significant; therefore, none of the loans acquired were accounted for under the guidance in ASC 310-30.

Credit discounts representing principal losses expected over the life of the loans are a component of the initial fair value for purchased loans acquired that are not deemed impaired at acquisition. Accordingly, an allowance for credit losses related to these loans is not carried over and recorded at the acquisition date. Subsequent to the acquisition date, the methods used to estimate the required allowance for credit losses for these loans is similar to originated loans; however, the Bank records a provision for loan losses only when the required allowance exceeds any remaining credit discounts. The remaining difference between the purchase price and the unpaid principal balance at the date of acquisition is recorded in interest income over the life of the loans. Management estimated the cash flows expected to be collected at acquisition using a third party that incorporated estimates of current key assumptions, such as default rates, severity, and prepayment speeds. The carrying amounts of those loans included in the balance sheet are $93.6 million and $115.7 million at September 30, 2011 and December 31, 2010, respectively.

The amount of loans on a non-accruing income status was $28.0 million at September 30, 2011 and $45.0 million at December 31, 2010. The total of loans on non-accrual that were in homogeneous pools and not evaluated individually for impairment were $6.5 million, and $7.6 million at September 30, 2011 and December 31, 2010, respectively. Additional interest which would have been recorded during the quarter ended September 30, 2011 was $0.2 million compared to $0.3 million and $0.4 million for quarters ended December 31, 2010 and September 30, 2010, 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 $9.5 million, $17.0 million, and $20.3 million at September 30, 2011, December 31, 2010, and September 30, 2010, respectively. Refer to note 1 to the consolidated financial statements for the year ended December 31, 2010 included in CTBI's Annual Report on Form 10-K for further information regarding our nonaccrual policy. Nonaccrual loans segregated by class of loans were as follows:

(in thousands)	September 30 2011		December 31 2010
Commercial:
Commercial construction	$	10,078	$	13,138
Commercial secured by real estate		9,235		15,608
Commercial other		2,131		9,338

Residential:
Real estate construction		873		636
Real estate mortgage		5,484		6,137
Home equity		185		164
Total nonaccrual loans	$	27,986	$	45,021

	September 30, 2011
(in thousands)	30-59 Days Past Due		60-89 Days Past Due		90+ Days Past Due		Total Past Due		Current		Total Loans		90+ and Accruing*
Commercial:
Commercial construction	$	1,140	$	0	$	12,355	$	13,495	$	107,647	$	121,142	$	2,821
Commercial secured by real estate		7,119		2,432		12,434		21,985		784,193		806,178		3,327
Equipment lease financing		0		0		0		0		10,765		10,765		0
Commercial other		3,270		275		1,950		5,495		371,395		376,890		667
Residential:
Real estate construction		179		281		885		1,345		49,105		50,450		26
Real estate mortgage		1,555		3,622		6,802		11,979		632,800		644,779		1,912
Home equity		1,075		196		421		1,692		82,481		84,173		287
Consumer:
Consumer direct		1,347		241		87		1,675		122,766		124,441		87
Consumer indirect		2,808		809		416		4,033		350,706		354,739		416
Total	$	18,493	$	7,856	$	35,350	$	61,699	$	2,511,858	$	2,573,557	$	9,543

	December 31, 2010
(in thousands)	30-59 Days Past Due		60-89 Days Past Due		90+ Days Past Due		Total Past Due		Current		Total Loans		90+ and Accruing*
Commercial:
Commercial construction	$	1,800	$	545	$	14,290	$	16,635	$	118,456	$	135,091	$	1,178
Commercial secured by real estate		6,382		8,618		22,195		37,195		769,854		807,049		9,641
Equipment lease financing		0		0		0		0		14,151		14,151		0
Commercial other		6,737		539		5,039		12,315		376,431		388,746		1,692
Residential:
Real estate construction		109		767		1,009		1,885		55,025		56,910		372
Real estate mortgage		1,478		3,764		8,844		14,086		609,765		623,851		3,337
Home equity		885		276		295		1,456		83,647		85,103		226
Consumer:
Consumer direct		1,569		242		70		1,881		124,165		126,046		70
Consumer indirect		2,851		684		498		4,033		364,200		368,233		498
Total	$	21,811	$	15,435	$	52,240	$	89,486	$	2,515,694	$	2,605,180	$	17,014

Bank procedures for assessing and maintaining adequate credit quality grading differ slightly depending on whether a new or renewed loan is being underwritten, or whether an existing loan is being re-evaluated for potential credit quality concerns. The latter usually occurs upon receipt of updated financial information, or other pertinent data, that would potentially cause a change in the loan grade.

The Bank categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, public information, and current economic trends. The Bank also considers the fair value of the underlying collateral and the strength and willingness of the guarantor(s). The Bank analyzes loans individually and based on this analysis, establishes a credit risk rating. The Bank uses the following definitions for risk ratings:

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Pass grades include investment grade, low risk, moderate risk, and acceptable risk loans. The loans range from loans that have no chance of resulting in a loss to loans that have a limited chance of resulting in a loss. Customers in this grade have excellent to fair credit ratings. The cash flows are adequate to meet required debt repayments.

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Watch graded loans are loans that warrant extra management attention but are not currently criticized. Loans on the watch list may be potential troubled credits or may warrant "watch" status for a reason not directly related to the asset quality of the credit. The watch grade is a management tool to identify credits which may be candidates for future classification or may temporarily warrant extra management monitoring.

�

Other assets especially mentioned (OAEM) reflects loans that are currently protected but are potentially weak. These loans constitute an undue and unwarranted credit risk but not to the point of justifying a classification of substandard. The credit risk may be relatively minor yet constitute an unwarranted risk in light of circumstances surrounding a specific asset. Loans in this grade display potential weaknesses which may, if unchecked or uncorrected, inadequately protect the Bank's credit position at some future date. The loans may be adversely affected by economic or market conditions.

�

Substandard grading indicates that the loan is inadequately protected by the current sound worth and paying capacity of the obligor or of the collateral pledged. These loans have a well-defined weakness or weaknesses that jeopardize the orderly liquidation of the debt with the distinct possibility that the Bank will sustain some loss if the deficiencies are not corrected.

�

Doubtful graded loans have the weaknesses inherent in the substandard grading with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable. The probability of loss is extremely high, but because of certain important and reasonably specific pending factors which may work to the Bank's advantage or strengthen the asset(s), its classification as an estimated loss is deferred until its more exact status may be determined. Pending factors include proposed merger, acquisition, or liquidation procedures, capital injection, perfecting liens on additional collateral, and refinancing plans.

�

A loss grading applies to loans that are considered uncollectible and of such little value that their continuance as bankable assets is not warranted. This classification does not mean that the asset has absolutely no recovery value, but rather it is not practical or desirable to defer writing off the asset. Losses must be taken in the period in which they surface as uncollectible, or in the case of collateral-dependent loans, a specific reserve in the amount of the expected loss is applied to the loan until the collateral is liquidated or we have taken possession and moved it into other real estate owned.

(in thousands)	Commercial Construction		Commercial Secured by Real Estate		Commercial Other		Equipment Leases		Total
September 30, 2011
Pass	$	80,207	$	650,654	$	322,494	$	10,765	$	1,064,120
Watch		18,079		76,034		38,392		0		132,505
OAEM		998		15,663		1,559		0		18,220
Substandard		10,949		53,926		10,086		0		74,961
Doubtful		9,857		8,985		1,879		0		20,721
Loss		1,052		916		2,480		0		4,448
Total	$	121,142	$	806,178	$	376,890	$	10,765	$	1,314,975

December 31, 2010
Pass	$	80,064	$	651,281	$	313,444	$	14,151	$	1,058,940
Watch		27,510		80,128		57,716		0		165,354
OAEM		853		8,163		731		0		9,747
Substandard		13,987		53,141		7,348		0		74,476
Doubtful		12,506		13,813		7,456		0		33,775
Loss		171		523		2,051		0		2,745
Total	$	135,091	$	807,049	$	388,746	$	14,151	$	1,345,037

The following tables present the credit risk profile of the Bank's residential real estate and consumer loan portfolios based on performing or nonperforming status, segregated by class, as of September 30, 2011 and December 31, 2010:

(in thousands)	Real Estate Construction		Real Estate Mortgage		Home Equity		Consumer Direct		Consumer Indirect
September 30, 2011
Performing	$	49,551	$	637,383	$	83,701	$	124,354	$	354,323
Nonperforming		899		7,396		472		87		416
Total	$	50,450	$	644,779	$	84,173	$	124,441	$	354,739

December 31, 2010
Performing	$	55,902	$	614,377	$	84,713	$	125,976	$	367,735
Nonperforming		1,008		9,474		390		70		498
Total	$	56,910	$	623,851	$	85,103	$	126,046	$	368,233

A loan is considered impaired, in accordance with the impairment accounting guidance (ASC 310-10-35-16), when based on current information and events, it is probable the Bank will be unable to collect all amounts due from the borrower in accordance with the contractual terms of the loan. Impaired loans include nonperforming commercial loans but also include loans modified in troubled debt restructurings where concessions have been granted to borrowers experiencing financial difficulties. These concessions could include a reduction in the interest rate on the loan, payment extensions, forgiveness of principal, forbearance or other actions intended to maximize collection.

	September 30, 2011
(in thousands)	Recorded Balance		Unpaid Principal Balance		Specific Allowance
Loans without a specific valuation allowance:
Commercial construction	$	5,748	$	5,748	$	0
Commercial secured by real estate		31,308		32,483		0
Commercial other		2,996		3,091		0
Real estate construction		28		28		0
Real estate mortgage		83		83		0
Consumer direct		78		78		0
Consumer indirect		121		121		0

Loans with a specific valuation allowance:
Commercial construction		9,247		10,756		3,714
Commercial secured by real estate		4,619		4,754		1,826
Commercial other		1,793		4,373		765

Commercial		55,711		61,205		6,305
Residential		111		111		0
Consumer		199		199		0
Total	$	56,021	$	61,515	$	6,305

	Three Months Ended				Nine Months Ended
	September 30, 2011				September 30, 2011
(in thousands)	Average Investment in Impaired Loans		Interest Income Recognized		Average Investment in Impaired Loans		Interest Income Recognized
Loans without a specific valuation allowance:
Commercial construction	$	5,733	$	76	$	9,239	$	193
Commercial secured by real estate		30,910		666		31,901		1,239
Commercial other		3,129		38		3,677		126
Real estate construction		28		0		19		1
Real estate mortgage		83		1		84		4
Consumer direct		79		2		78		6
Consumer indirect		124		3		101		8

Loans with a specific valuation allowance:
Commercial construction		9,440		0		8,614		0
Commercial secured by real estate		4,632		0		5,025		23
Commercial other		1,873		0		4,666		0

Commercial		55,717		780		63,122		1,581
Residential		111		1		103		5
Consumer		203		5		179		14
Total	$	56,031	$	786	$	63,404	$	1,600

	December 31, 2010
(in thousands)	Recorded Balance		Unpaid Contractual Principal Balance		Specific Allowance		Average Investment in Impaired Loans		Interest Income Recognized
Loans without a specific valuation allowance:
Commercial construction	$	6,313	$	6,313	$	0	$	6,262	$	43
Commercial secured by real estate		23,503		24,034		0		23,629		330
Commercial other		4,357		4,616		0		4,407		71
Real estate construction		790		790		0		790		0
Real estate mortgage		950		950		0		950		0

Loans with a specific valuation allowance:
Commercial construction		9,528		10,813		2,554		9,686		0
Commercial secured by real estate		9,188		9,358		2,575		9,191		2
Commercial other		8,680		10,338		3,093		8,090		85

Commercial		61,569		65,472		8,222		61,265		531
Residential		1,740		1,740		0		1,740		0
Total	$	63,309	$	67,212	$	8,222	$	63,005	$	531

Included in certain loan categories of impaired loans are certain loans and leases that have been modified in a troubled debt restructuring, where economic concessions have been granted to borrowers who have experienced financial difficulties. These concessions typically result from our loss mitigation activities and could include reductions in the interest rate, payment extensions, forgiveness of principal, forbearance or other actions. Modifications of terms for our loans and their inclusion as troubled debt restructurings are based on individual facts and circumstances. Loan modifications that are included as troubled debt restructurings may involve either an increase or reduction of the interest rate, extension of the term of the loan, or deferral of principal payments, regardless of the period of the modification. All of the loans were modified due to financial stress of the borrower.

When we modify loans and leases in a troubled debt restructuring, we evaluate any possible impairment similar to other impaired loans based on the present value of expected future cash flows, discounted at the contractual interest rate of the original loan or lease agreement, or use the current fair value of the collateral, less selling costs for collateral dependent loans. If we determined that the value of the modified loan is less than the recorded investment in the loan (net of previous charge-offs, deferred loan fees or costs and unamortized premium or discount), impairment is recognized through a specific reserve or a charge-off to the allowance. In periods subsequent to modification, we evaluate all troubled debt restructuring, including those that have payment defaults, for possible impairment and recognize impairment through the allowance.

(in thousands)	September 30 2011		December 31 2010
Commercial:
Commercial construction	$	5,388	$	2,973
Commercial secured by real estate		18,871		2,511
Commercial other		2,320		1,156

Residential:
Real estate construction		28		0
Real estate mortgage		83		0

Consumer:
Consumer direct		78		0
Consumer indirect		121		0
Total restructured loans	$	26,889	$	6,640

	Three Months Ended September 30, 2011							Nine Months Ended September 30, 2011
(in thousands)	Number of Loans		Post-Modification Outstanding Balance		Net Charge-offs Resulting from Modification			Number of Loans		Post-Modification Outstanding Balance		Net Charge-offs Resulting from Modification
Commercial:
Commercial construction		5	$	138	$	0			7	$	3,372	$	0
Commercial secured by real estate		7		6,949		0			17		17,626		0
Commercial other		1		3		(1	)		9		1,977		(1	)
Residential:
Real estate construction		0		0		0			1		28		0
Real estate mortgage		0		0		0			2		88		0
Consumer:
Consumer direct		1		6		0			6		82		0
Consumer indirect		2		41		0			8		131		0
Total		16	$	7,137	$	(1	)		50	$	23,304	$	(1	)

Loan modifications resulted in no additional specific reserve allocations during the three months ended September 30, 2011 and an additional specific reserve allocation of $200 thousand during the nine months ended September 30, 2011 as a result of a loan modification in the commercial other loan classification.

Presented below, segregated by class of loans, are troubled debt restructurings that were performing in accordance with their modified terms. CTBI considers a troubled debt restructuring to be performing in accordance with its modified terms if the loan is not past due 30 days or more as of the reporting date.

(in thousands)	September 30 2011		December 31 2010
Commercial:
Commercial construction	$	1,324	$	1,633
Commercial secured by real estate		16,066		2,427
Commercial other		393		771

Residential:
Real estate construction		0		0
Real estate mortgage		67		0

Consumer:
Consumer direct		48		0
Consumer indirect		121		0
Total current restructured loans	$	18,019	$	4,831

Loans retain their accrual status at the time of their modification. As a result, if a loan is on nonaccrual at the time it is modified, it stays as nonaccrual, and if a loan is on accrual at the time of the modification, it generally stays on accrual. Commercial and consumer loans modified in a troubled debt restructuring are closely monitored for delinquency as an early indicator of possible future default. If loans modified in a troubled debt restructuring subsequently default, CTBI evaluates the loan for possible further impairment. The allowance for loan losses may be increased, adjustments may be made in the allocation of the allowance, or partial charge-offs may be taken to further write-down the carrying value of the loan. Presented below, segregated by class of loans, are loans that were modified as troubled debt restructurings within the previous 12 months which have subsequently defaulted. CTBI considers a loan in default when it is 90 days or more past due or transferred to nonaccrual.

	Three Months Ended				Nine Months Ended
(in thousands)	September 30 2011				September 30 2011
	Number of Loans		Recorded Balance		Number of Loans		Recorded Balance
Commercial:
Commercial construction		2	$	3,913		2	$	3,913
Commercial secured by real estate		0		0		0		0
Commercial other		0		0		2		83

Residential:
Real estate construction		0		0		0		0
Real estate mortgage		0		0		0		0

Consumer:
Consumer direct		1		7		1		7
Consumer indirect		0		0		0		0
Total defaulted restructured loans		3	$	3,920		5	$	4,003

The following tables present the activity in the allowance for loan losses and the recorded investment in loans based on portfolio segment and impairment method for the three and nine months ended September 30, 2011 and the year ended December 31, 2010:

	Three Months Ended September 30, 2011
(in thousands)	Commercial Construction		Commercial Secured by Real Estate			Commercial Other		Equipment Lease Financing		Real Estate Construction		Real Estate Mortgage		Home Equity		Consumer Direct			Consumer Indirect		Total
Allowance for loan losses
Beginning balance	$	4,637	$	13,202		$	5,452	$	123	$	296	$	3,938	$	514	$	1,067		$	5,923	$	35,152
Provision charged to expense		1,162		(134	)		366		0		261		692		56		(6	)		118		2,515
Losses charged off		304		369			856		0		244		566		44		261			716		3,360
Recoveries		16		27			127		0		6		17		7		141			351		692
Ending balance	$	5,511	$	12,726		$	5,089	$	123	$	319	$	4,081	$	533	$	941		$	5,676	$	34,999

Ending balance:
Individually evaluated for impairment	$	3,714	$	1,826		$	765	$	0	$	0	$	0	$	0	$	0		$	0	$	6,305
Collectively evaluated for impairment	$	1,797	$	10,900		$	4,324	$	123	$	319	$	4,081	$	533	$	941		$	5,676	$	28,694

Loans
Ending balance:
Individually evaluated for impairment	$	14,995	$	35,927		$	4,789	$	0	$	28	$	83	$	0	$	78		$	121	$	56,021
Collectively evaluated for impairment	$	106,147	$	770,251		$	372,101	$	10,765	$	50,422	$	644,696	$	84,173	$	124,363		$	354,618	$	2,517,536

	Nine Months Ended September 30, 2011
(in thousands)	Commercial Construction		Commercial Secured by Real Estate		Commercial Other		Equipment Lease Financing			Real Estate Construction		Real Estate Mortgage		Home Equity		Consumer Direct		Consumer Indirect		Total
Allowance for loan losses
Beginning balance	$	4,332	$	12,327	$	7,392	$	148		$	271	$	2,982	$	407	$	1,169	$	5,777	$	34,805
Provision charged to expense		1,958		2,858		1,039		(25	)		347		2,247		282		70		1,446		10,222
Losses charged off		808		2,582		3,691		0			319		1,217		171		670		2,630		12,088
Recoveries		29		123		349		0			20		69		15		372		1,083		2,060
Ending balance	$	5,511	$	12,726	$	5,089	$	123		$	319	$	4,081	$	533	$	941	$	5,676	$	34,999

Ending balance:
Individually evaluated for impairment	$	3,714	$	1,826	$	765	$	0		$	0	$	0	$	0	$	0	$	0	$	6,305
Collectively evaluated for impairment	$	1,797	$	10,900	$	4,324	$	123		$	319	$	4,081	$	533	$	941	$	5,676	$	28,694

Loans
Ending balance:
Individually evaluated for impairment	$	14,995	$	35,927	$	4,789	$	0		$	28	$	83	$	0	$	78	$	121	$	56,021
Collectively evaluated for impairment	$	106,147	$	770,251	$	372,101	$	10,765		$	50,422	$	644,696	$	84,173	$	124,363	$	354,618	$	2,517,536

	Twelve Months Ended December 31, 2010
(in thousands)	Commercial Construction		Commercial Secured by Real Estate		Commercial Other		Equipment Lease Financing			Real Estate Construction			Real Estate Mortgage		Home Equity		Consumer Direct		Consumer Indirect		Total
Allowance for loan losses
Beginning balance	$	3,381	$	10,961	$	7,472	$	221		$	291		$	3,041	$	455	$	1,258	$	5,563	$	32,643
Provision charged to expense		2,640		5,029		4,416		(73	)		(17	)		526		287		532		3,144		16,484
Losses charged off		1,695		3,826		5,184		0			22			684		358		1,256		4,611		17,636
Recoveries		6		163		688		0			19			99		23		635		1,681		3,314
Ending balance	$	4,332	$	12,327	$	7,392	$	148		$	271		$	2,982	$	407	$	1,169	$	5,777	$	34,805

Ending balance:
Individually evaluated for impairment	$	2,554	$	2,575	$	3,093	$	0		$	0		$	0	$	0	$	0	$	0	$	8,222
Collectively evaluated for impairment	$	1,778	$	9,752	$	4,299	$	148		$	271		$	2,982	$	407	$	1,169	$	5,777	$	26,583

Loans
Ending balance:
Individually evaluated for impairment	$	15,841	$	32,691	$	13,037	$	0		$	790		$	950	$	0	$	0	$	0	$	63,309
Collectively evaluated for impairment	$	119,250	$	774,358	$	375,709	$	14,151		$	56,120		$	622,901	$	85,103	$	126,046	$	368,233	$	2,541,871

	Three Months Ended			Nine Months Ended
(in thousands)	September 30, 2010			September 30, 2010
Allowance balance, beginning of period	$	36,156		$	32,643
Additions to allowance charged against operations		3,676			12,504
Recoveries credited to allowance		855			2,473
Losses charged against allowance		(6,449	)		(13,382	)
Allowance balance, end of period	$	34,238		$	34,238