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Loans
9 Months Ended
Sep. 30, 2015
Loans [Abstract]  
Loans
Note 4 – Loans

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

 
(in thousands)
 
September 30
2015
  
December 31
2014
 
Commercial construction
 
$
106,855
  
$
121,942
 
Commercial secured by real estate
  
997,654
   
948,626
 
Equipment lease financing
  
9,146
   
10,344
 
Commercial other
  
346,318
   
352,048
 
Real estate construction
  
62,226
   
62,412
 
Real estate mortgage
  
706,187
   
712,465
 
Home equity
  
88,624
   
88,335
 
Consumer direct
  
125,847
   
122,136
 
Consumer indirect
  
377,603
   
315,516
 
Total loans
 
$
2,820,460
  
$
2,733,824
 

CTBI has segregated and evaluates its loan portfolio through nine portfolio segments. CTBI serves customers in small and mid-sized communities in eastern, northeastern, central, and south central Kentucky, southern West Virginia, and northeastern Tennessee.  Therefore, CTBI's exposure to credit risk is significantly affected by changes in these communities.

Commercial construction loans are for the purpose of erecting or rehabilitating buildings or other structures for commercial purposes, including any infrastructure necessary for development.   Included in this category are improved property, land development, and tract development loans.  The terms of these loans are generally short-term with permanent financing upon completion.

Commercial real estate loans include loans secured by nonfarm, nonresidential properties, 1-4 family/multi-family properties, farmland, and other commercial real estate.  These loans are originated based on the borrower's ability to service the debt and secondarily based on the fair value of the underlying collateral.

Equipment lease financing loans are fixed, variable, and tax exempt leases for commercial purposes.

Commercial other loans consist of commercial check loans, agricultural loans, receivable financing, floorplans, loans to financial institutions, loans for purchasing or carrying securities, and other commercial purpose loans.  Commercial loans are underwritten based on the borrower's ability to service debt from the business's underlying cash flows.  As a general practice, we obtain collateral such as real estate, equipment, or other assets, although such loans may be uncollateralized but guaranteed.

Real estate construction loans are typically for owner-occupied properties.  The terms of these loans are generally short-term with permanent financing upon completion.

Residential real estate loans are a mixture of fixed rate and adjustable rate first and second lien residential mortgage loans.  As a policy, CTBI holds adjustable rate loans and sells the majority of its fixed rate first lien mortgage loans into the secondary market.  Changes in interest rates or market conditions may impact a borrower's ability to meet contractual principal and interest payments.  Residential real estate loans are secured by real property.

Home equity lines are revolving adjustable rate credit lines secured by real property.

Consumer direct loans are primarily fixed rate products comprised of unsecured loans, consumer revolving credit lines, deposit secured loans, and all other consumer purpose loans.

Consumer indirect loans are fixed rate loans secured by automobiles, trucks, vans, and recreational vehicles originated at the selling dealership underwritten and purchased by CTBI's indirect lending department.  Both new and used products are financed.  Only dealers who have executed dealer agreements with CTBI participate in the indirect lending program.

Not included in the loan balances above were loans held for sale in the amount of $2.0 million at September 30, 2015 and $2.3 million at December 31, 2014, respectively.

Refer to note 1 to the condensed consolidated financial statements for further information regarding our nonaccrual policy.  Nonaccrual loans segregated by class of loans were as follows:

 (in thousands)
 
September 30
2015
  
December 31
2014
 
Commercial:
    
Commercial construction
 
$
3,443
  
$
4,339
 
Commercial secured by real estate
  
4,134
   
6,725
 
Commercial other
  
1,412
   
2,423
 
         
Residential:
        
Real estate construction
  
311
   
602
 
Real estate mortgage
  
5,108
   
6,513
 
Home equity
  
200
   
369
 
         
Consumer:
        
Consumer direct
  
114
   
0
 
Total nonaccrual loans
 
$
14,722
  
$
20,971
 

The following tables present CTBI's loan portfolio aging analysis, segregated by class, as of September 30, 2015 and December 31, 2014:

  
September 30, 2015
 
(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
 
$
251
  
$
7
  
$
5,133
  
$
5,391
  
$
101,464
  
$
106,855
  
$
1,690
 
Commercial secured by real estate
  
5,348
   
1,401
   
6,574
   
13,323
   
984,331
   
997,654
   
4,766
 
Equipment lease financing
  
0
   
0
   
0
   
0
   
9,146
   
9,146
   
0
 
Commercial other
  
870
   
417
   
4,152
   
5,439
   
340,879
   
346,318
   
2,904
 
Residential:
                            
Real estate construction
  
609
   
129
   
717
   
1,455
   
60,771
   
62,226
   
420
 
Real estate mortgage
  
1,517
   
4,637
   
10,906
   
17,060
   
689,127
   
706,187
   
7,111
 
Home equity
  
516
   
122
   
749
   
1,387
   
87,237
   
88,624
   
602
 
Consumer:
                            
Consumer direct
  
1,055
   
260
   
89
   
1,404
   
124,443
   
125,847
   
89
 
Consumer indirect
  
2,503
   
404
   
419
   
3,326
   
374,277
   
377,603
   
419
 
Total
 
$
12,669
  
$
7,377
  
$
28,739
  
$
48,785
  
$
2,771,675
  
$
2,820,460
  
$
18,001
 


  
December 31, 2014
 
(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
 
$
40
  
$
31
  
$
6,171
  
$
6,242
  
$
115,700
  
$
121,942
  
$
1,863
 
Commercial secured by real estate
  
2,471
   
1,595
   
10,763
   
14,829
   
933,797
   
948,626
   
4,682
 
Equipment lease financing
  
0
   
0
   
0
   
0
   
10,344
   
10,344
   
0
 
Commercial other
  
826
   
55
   
4,205
   
5,086
   
346,962
   
352,048
   
2,367
 
Residential:
                            
Real estate construction
  
92
   
144
   
985
   
1,221
   
61,191
   
62,412
   
383
 
Real estate mortgage
  
1,005
   
5,171
   
13,049
   
19,225
   
693,240
   
712,465
   
7,742
 
Home equity
  
779
   
197
   
703
   
1,679
   
86,656
   
88,335
   
422
 
Consumer:
                            
Consumer direct
  
1,307
   
295
   
141
   
1,743
   
120,393
   
122,136
   
141
 
Consumer indirect
  
2,304
   
586
   
385
   
3,275
   
312,241
   
315,516
   
385
 
Total
 
$
8,824
  
$
8,074
  
$
36,402
  
$
53,300
  
$
2,680,524
  
$
2,733,824
  
$
17,985
 

*90+ and Accruing are also included in 90+ Days Past Due column.

The risk characteristics of CTBI's material portfolio segments are as follows:

Commercial construction loans generally are made to customers for the purpose of building income-producing properties.  Personal guarantees of the principals are generally required.  Such loans are made on a projected cash flow basis and are secured by the project being constructed.  Construction loan draw procedures are included in each specific loan agreement, including required documentation items and inspection requirements.  Construction loans may convert to term loans at the end of the construction period, or may be repaid by the take-out commitment from another financing source.  If the loan is to convert to a term loan, the repayment ability is based on the borrower's projected cash flow.  Risk is mitigated during the construction phase by requiring proper documentation and inspections whenever a draw is requested.  Loans in amounts greater than $500,000 generally require a performance bond to be posted by the general contractor to assure completion of the project.

Commercial real estate loans are viewed primarily as cash flow loans and secondarily as loans secured by real estate.  Commercial real estate lending typically involves higher loan principal amounts and the repayment of these loans is generally dependent on the successful operation of the property securing the loan or the business conducted on the property securing the loan.  Commercial real estate loans may be more adversely affected by conditions in the real estate markets or in the general economy.  Management monitors and evaluates commercial real estate loans based on collateral and risk grade criteria.

Equipment lease financing is underwritten by our commercial lenders using the same underwriting standards as would be applied to a secured commercial loan requesting 100% financing.  The pricing for equipment lease financing is comparable to that of borrowers with similar quality commercial credits with similar collateral.  Maximum terms of equipment leasing are determined by the type and expected life of the equipment to be leased.  Residual values are determined by appraisals or opinion letters from industry experts.  Leases must be in conformity with our consolidated annual tax plan.  As we underwrite our equipment lease financing in a manner similar to our commercial loan portfolio described below, the risk characteristics for this portfolio mirror that of the commercial loan portfolio.

Commercial loans are primarily based on the identified cash flows of the borrower and secondarily on the underlying collateral provided by the borrower.  The cash flows of borrowers, however, may not be as expected and the collateral securing these loans may fluctuate in value.  Most commercial loans are secured by the assets being financed or other business assets such as accounts receivable or inventory and may incorporate a personal guarantee; however, some short-term loans may be made on an unsecured basis.  In the case of loans secured by accounts receivable, the availability of funds for the repayment of these loans may be substantially dependent on the ability of the borrower to collect amounts due from its customers.

With respect to residential loans that are secured by 1-4 family residences and are generally owner occupied, CTBI generally establishes a maximum loan-to-value ratio and requires private mortgage insurance if that ratio is exceeded.  Home equity loans are typically secured by a subordinate interest in 1-4 family residences. Residential construction loans are handled through the home mortgage area of the bank.  The repayment ability of the borrower and the maximum loan-to-value ratio are calculated using the normal mortgage lending criteria.  Draws are processed based on percentage of completion stages including normal inspection procedures.  Such loans generally convert to term loans after the completion of construction.

Consumer loans are secured by consumer assets such as automobiles or recreational vehicles.  Some consumer loans are unsecured such as small installment loans and certain lines of credit.  Our determination of a borrower's ability to repay these loans is primarily dependent on the personal income and credit rating of the borrowers, which can be impacted by economic conditions in their market areas such as unemployment levels.  Repayment can also be impacted by changes in property values on residential properties.  Risk is mitigated by the fact that the loans are of smaller individual amounts and spread over a large number of borrowers.

The indirect lending area of the bank generally deals with purchasing/funding consumer contracts with new and used automobile dealers.  The dealers generate consumer loan applications which are forwarded to the indirect loan processing area for approval or denial.  Loan approvals or denials are based on the creditworthiness and repayment ability of the borrower, and on the collateral value.  The dealers may have recourse agreements with the Bank.

Credit Quality Indicators:

CTBI 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, credit documentation, public information, and current economic trends, among other factors.  CTBI also considers the fair value of the underlying collateral and the strength and willingness of the guarantor(s).  CTBI analyzes commercial loans individually by classifying the loans as to credit risk.  Loans classified as loss, doubtful, substandard, or special mention are reviewed quarterly by CTBI for further deterioration or improvement to determine if appropriately classified and valued if deemed impaired.  All other commercial loan reviews are completed every 12 to 18 months.  In addition, during the renewal process of any loan, as well as if a loan becomes past due or if other information becomes available, CTBI will evaluate the loan grade.  CTBI uses the following definitions for risk ratings:

Ø
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.

Ø
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.

Ø
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 CTBI's credit position at some future date.  The loans may be adversely affected by economic or market conditions.

Ø
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 CTBI will sustain some loss if the deficiencies are not corrected.

Ø
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 CTBI'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.

The following table presents the credit risk profile of CTBI's commercial loan portfolio based on rating category and payment activity, segregated by class of loans, as of September 30, 2015 and December 31, 2014:

 (in thousands)
 
Commercial Construction
  
Commercial Secured by Real Estate
  
Equipment Leases
  
Commercial Other
  
Total
 
September 30, 2015
          
Pass
 
$
85,878
  
$
885,941
  
$
9,146
  
$
296,254
  
$
1,277,219
 
Watch
  
6,615
   
69,393
   
0
   
41,547
   
117,555
 
OAEM
  
4,205
   
8,286
   
0
   
1,001
   
13,492
 
Substandard
  
8,999
   
33,162
   
0
   
6,451
   
48,612
 
Doubtful
  
1,158
   
872
   
0
   
1,065
   
3,095
 
Total
 
$
106,855
  
$
997,654
  
$
9,146
  
$
346,318
  
$
1,459,973
 
                     
December 31, 2014
                    
Pass
 
$
101,314
  
$
834,751
  
$
10,344
  
$
307,270
  
$
1,253,679
 
Watch
  
9,857
   
69,123
   
0
   
36,114
   
115,094
 
OAEM
  
934
   
10,973
   
0
   
881
   
12,788
 
Substandard
  
5,647
   
27,901
   
0
   
5,772
   
39,320
 
Doubtful
  
4,190
   
5,878
   
0
   
2,011
   
12,079
 
Total
 
$
121,942
  
$
948,626
  
$
10,344
  
$
352,048
  
$
1,432,960
 

The following table presents the credit risk profile of the CTBI's residential real estate and consumer loan portfolios based on performing or nonperforming status, segregated by class, as of September 30, 2015 and December 31, 2014:

(in thousands)
 
Real Estate Construction
  
Real Estate Mortgage
  
Home Equity
  
Consumer Direct
  
Consumer
Indirect
  
Total
 
September 30, 2015
            
Performing
 
$
61,495
  
$
693,968
  
$
87,822
  
$
125,644
  
$
377,184
  
$
1,346,113
 
Nonperforming (1)
  
731
   
12,219
   
802
   
203
   
419
   
14,374
 
Total
 
$
62,226
  
$
706,187
  
$
88,624
  
$
125,847
  
$
377,603
  
$
1,360,487
 
                         
December 31, 2014
                        
Performing
 
$
61,427
  
$
698,210
  
$
87,544
  
$
121,995
  
$
315,131
  
$
1,284,307
 
Nonperforming (1)
  
985
   
14,255
   
791
   
141
   
385
   
16,557
 
Total
 
$
62,412
  
$
712,465
  
$
88,335
  
$
122,136
  
$
315,516
  
$
1,300,864
 

(1)  A loan is considered nonperforming if it is 90 days or more past due and/or on nonaccrual.

The total of consumer mortgage loans secured by real estate properties for which formal foreclosure proceedings are in process totaled $5.3 million at September 30, 2015 compared to $5.9 million at December 31, 2014.

A loan is considered impaired, in accordance with the impairment accounting guidance, when based on current information and events, it is probable CTBI 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.

The following tables present impaired loans, the average investment in impaired loans, and interest income recognized on impaired loans for the periods ended September 30, 2015, December 31, 2014, and September 30, 2014:

  
September 30, 2015
 
(in thousands)
 
Recorded Balance
  
Unpaid Contractual Principal Balance
  
Specific Allowance
 
Loans without a specific valuation allowance:
      
Commercial construction
 
$
4,669
  
$
4,669
  
$
0
 
Commercial secured by real estate
  
30,318
   
31,551
   
0
 
Commercial other
  
7,163
   
8,804
   
0
 
Real estate mortgage
  
1,189
   
1,189
   
0
 
             
Loans with a specific valuation allowance:
            
Commercial construction
  
3,411
   
3,412
   
719
 
Commercial secured by real estate
  
835
   
1,075
   
317
 
Commercial other
  
754
   
935
   
312
 
             
Totals:
            
Commercial construction
  
8,080
   
8,081
   
719
 
Commercial secured by real estate
  
31,153
   
32,626
   
317
 
Commercial other
  
7,917
   
9,739
   
312
 
Real estate mortgage
  
1,189
   
1,189
   
0
 
Total
 
$
48,339
  
$
51,635
  
$
1,348
 

  
Three Months Ended
  
Nine Months Ended
 
  
September 30, 2015
  
September 30, 2015
 
(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
 
$
4,864
  
$
41
  
$
5,142
  
$
160
 
Commercial secured by real estate
  
30,713
   
316
   
30,357
   
985
 
Commercial other
  
7,312
   
73
   
9,182
   
201
 
Real estate mortgage
  
1,183
   
13
   
1,090
   
37
 
                 
Loans with a specific valuation allowance:
                
Commercial construction
  
3,445
   
0
   
3,712
   
0
 
Commercial secured by real estate
  
841
   
6
   
2,244
   
7
 
Commercial other
  
776
   
1
   
788
   
1
 
                 
Totals:
                
Commercial construction
  
8,309
   
41
   
8,854
   
160
 
Commercial secured by real estate
  
31,554
   
322
   
32,601
   
992
 
Commercial other
  
8,088
   
74
   
9,970
   
202
 
Real estate mortgage
  
1,183
   
13
   
1,090
   
37
 
Total
 
$
49,134
  
$
450
  
$
52,515
  
$
1,391
 

  
December 31, 2014
 
(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
 
$
5,653
  
$
5,654
  
$
0
  
$
5,415
  
$
205
 
Commercial secured by real estate
  
31,639
   
33,268
   
0
   
34,650
   
1,180
 
Commercial other
  
13,069
   
14,597
   
0
   
15,663
   
783
 
Real estate mortgage
  
1,277
   
1,277
   
0
   
1,507
   
53
 
                     
Loans with a specific valuation allowance:
                    
Commercial construction
  
3,974
   
3,974
   
734
   
4,216
   
0
 
Commercial secured by real estate
  
2,718
   
2,876
   
827
   
4,376
   
11
 
Commercial other
  
738
   
862
   
181
   
531
   
1
 
                     
Totals:
                    
Commercial construction
  
9,627
   
9,628
   
734
   
9,631
   
205
 
Commercial secured by real estate
  
34,357
   
36,144
   
827
   
39,026
   
1,191
 
Commercial other
  
13,807
   
15,459
   
181
   
16,194
   
784
 
Real estate mortgage
  
1,277
   
1,277
   
0
   
1,507
   
53
 
Total
 
$
59,068
  
$
62,508
  
$
1,742
  
$
66,358
  
$
2,233
 

  
September 30, 2014
 
(in thousands)
 
Recorded Balance
  
Unpaid Contractual Principal Balance
  
Specific Allowance
 
Loans without a specific valuation allowance:
      
Commercial construction
 
$
5,250
  
$
5,251
  
$
0
 
Commercial secured by real estate
  
33,010
   
34,086
   
0
 
Commercial other
  
15,972
   
18,247
   
0
 
Real estate mortgage
  
1,874
   
1,875
   
0
 
             
Loans with a specific valuation allowance:
            
Commercial construction
  
4,149
   
4,149
   
734
 
Commercial secured by real estate
  
6,070
   
6,219
   
1,273
 
Commercial other
  
586
   
710
   
211
 
             
Totals:
            
Commercial construction
  
9,399
   
9,400
   
734
 
Commercial secured by real estate
  
39,080
   
40,305
   
1,273
 
Commercial other
  
16,558
   
18,957
   
211
 
Real estate mortgage
  
1,874
   
1,875
   
0
 
Total
 
$
66,911
  
$
70,537
  
$
2,218
 

  
Three Months Ended
  
Nine Months Ended
 
  
September 30, 2014
  
September 30, 2014
 
(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
 
$
5,259
  
$
44
  
$
5,330
  
$
172
 
Commercial secured by real estate
  
33,290
   
261
   
34,464
   
858
 
Commercial other
  
17,577
   
248
   
16,421
   
619
 
Real estate mortgage
  
1,860
   
12
   
1,583
   
44
 
                 
Loans with a specific valuation allowance:
                
Commercial construction
  
4,213
   
0
   
4,270
   
0
 
Commercial secured by real estate
  
6,076
   
5
   
4,912
   
9
 
Commercial other
  
587
   
0
   
460
   
0
 
                 
Totals:
                
Commercial construction
  
9,472
   
44
   
9,600
   
172
 
Commercial secured by real estate
  
39,366
   
266
   
39,376
   
867
 
Commercial other
  
18,164
   
248
   
16,881
   
619
 
Real estate mortgage
  
1,860
   
12
   
1,583
   
44
 
Total
 
$
68,862
  
$
570
  
$
67,440
  
$
1,702
 

*Cash basis interest is substantially the same as interest income recognized.

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 and/or interest payments, regardless of the period of the modification.  All of the loans identified as troubled debt restructuring were modified due to financial stress of the borrower.  In order to determine if a borrower is experiencing financial difficulty, an evaluation is performed to determine the probability that the borrower will be in payment default on any of its debt in the foreseeable future without the modification.  This evaluation is performed under CTBI's internal underwriting policy.

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 an allowance estimate 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.

During 2015, certain loans were modified in troubled debt restructurings, where economic concessions were granted to borrowers consisting of reductions in the interest rates, payment extensions, forgiveness of principal, and forbearances.  Presented below, segregated by class of loans, are troubled debt restructurings that occurred during the three and nine months ended September 30, 2015 and 2014 and the year ended December 31, 2014:

  
Three Months Ended
September 30, 2015
 
(in thousands)
 
Number of Loans
  
Term Modification
  
Rate Modification
  
Combination
  
Post-Modification Outstanding Balance
 
Commercial:
          
Commercial secured by real estate
  
5
  
$
346
  
$
0
  
$
165
  
$
511
 
Commercial other
  
1
   
1,139
   
0
   
0
   
1,139
 
Total troubled debt restructurings
  
6
  
$
1,485
  
$
0
  
$
165
  
$
1,650
 

  
Nine Months Ended
September 30, 2015
 
(in thousands)
 
Number of Loans
  
Term Modification
  
Rate Modification
  
Combination
  
Post-Modification Outstanding Balance
 
Commercial:
          
Commercial secured by real estate
  
13
  
$
953
  
$
0
  
$
165
  
$
1,118
 
Commercial other
  
4
   
1,193
   
0
   
0
   
1,193
 
Residential:
                    
Real estate mortgage
  
1
   
0
   
0
   
290
   
290
 
Total troubled debt restructurings
  
18
  
$
2,146
  
$
0
  
$
455
  
$
2,601
 

  
Three Months Ended
September 30, 2014
 
(in thousands)
 
Number of Loans
  
Term Modification
  
Rate Modification
  
Combination
  
Post-Modification Outstanding Balance
 
Commercial:
          
Commercial construction
  
1
  
$
7
  
$
0
  
$
  0  
$
7
 
Commercial secured by real estate
  
4
   
2,416
   
0
   
67
   
2,483
 
Commercial other
  
4
   
451
   
0
   
0
   
451
 
Total troubled debt restructurings
  
9
  
$
2,874
  
$
0
  
$
67
  
$
2,941
 

  
Nine Months Ended
September 30, 2014
 
(in thousands)
 
Number of Loans
  
Term Modification
  
Rate Modification
  
Combination
  
Post-Modification Outstanding Balance
 
Commercial:
          
Commercial construction
  
1
  
$
7
  
$
0
  
$
0
  
$
7
 
Commercial secured by real estate
  
7
   
2,647
   
0
   
67
   
2,714
 
Commercial other
  
7
   
512
   
0
   
0
   
512
 
Residential:
                    
Real estate mortgage
  
2
   
0
   
0
   
849
   
849
 
Total troubled debt restructurings
  
17
  
$
3,166
  
$
0
  
$
916
  
$
4,082
 

  
Year Ended
December 31, 2014
 
(in thousands)
 
Number of Loans
  
Term Modification
  
Rate Modification
  
Combination
  
Post-Modification Outstanding Balance
 
Commercial:
          
Commercial construction
  
1
  
$
7
  
$
0
  
$
0
  
$
7
 
Commercial secured by real estate
  
11
   
5,707
   
0
   
68
   
5,775
 
Commercial other
  
8
   
1,268
   
0
   
0
   
1,268
 
Residential:
                    
Real estate mortgage
  
2
   
0
   
0
   
848
   
848
 
Total troubled debt restructurings
  
22
  
$
6,982
  
$
0
  
$
916
  
$
7,898
 

No charge-offs have resulted from modifications for any of the presented periods.

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.  CTBI generally considers a loan in default when it is 90 days or more past due or transferred to nonaccrual.  Presented below, segregated by class of loans, are loans that were modified as troubled debt restructurings within the past twelve months which have subsequently defaulted.

 (in thousands)
 
Three Months Ended
September 30, 2015
  
Nine Months Ended
September 30, 2015
 
  
Number of Loans
  
Recorded Balance
  
Number of Loans
  
Recorded Balance
 
Commercial:
        
Commercial secured by real estate
  
2
  
$
31
   
4
  
$
390
 
Residential:
                
Real estate mortgage
  
0
   
0
   
1
   
290
 
Total defaulted restructured loans
  
2
  
$
31
   
5
  
$
680
 
 
 (in thousands)
 
Three Months Ended
September 30, 2014
  
Nine Months Ended
September 30, 2014
 
  
Number of Loans
  
Recorded Balance
  
Number of Loans
  
Recorded Balance
 
Commercial:
        
Commercial secured by real estate
  
1
  
$
2,892
   
1
  
$
2,892
 
Residential:
                
Real estate mortgage
  
1
   
594
   
2
   
1,175
 
Total defaulted restructured loans
  
2
  
$
3,486
   
3
  
$
4,067