COMMUNITY TRUST BANCORP INC /KY/ Debt Disclosure

9.  Borrowings

Short-term debt is categorized as follows:

See note 10 for additional information regarding our repurchase agreements.  All federal funds purchased mature and reprice daily.  The average rates paid for federal funds purchased and repurchase agreements on December 31, 2025 were 3.55% and 3.56%, respectively.

Long-term debt is categorized as follows:

On March 30, 2007, CTBI issued $61.3 million in junior subordinated debentures to a newly formed unconsolidated Delaware statutory trust subsidiary which in turn issued $59.5 million of capital securities in a private placement to institutional investors.  The debentures, which mature in 30 years but are redeemable at par at CTBI’s option after five years, were issued at a rate of 6.52% until June 1, 2012, and thereafter at a floating rate based on the three-month London Interbank Offered Rate (“LIBOR”) plus 1.59%.  The underlying capital securities were issued at the equivalent rates and terms.  With the elimination of LIBOR, the benchmark replacement rate used is the 3-month CME Term SOFR as adjusted by the relevant spread adjustment, which is 0.26161%, plus 1.59%.  The proceeds of the debentures were used to fund the redemption on April 2, 2007 of all CTBI’s outstanding 9.0% and 8.25% junior subordinated debentures in the total amount of $61.3 million.  In May 2017, CTBI was able to purchase $2.0 million of the junior subordinated debentures in the open market at a purchase price of $1.4 million, resulting in a gain of $0.6 million.  In August 2019, an additional $1.5 million was purchased in the open market at a price of $1.3 million, resulting in a gain of $0.2 million. The junior subordinated debentures will be retained by CTBI until maturity, and CTBI will continue to report the junior subordinated debentures at the net amount outstanding of $57.8 million.

On November 26, 2025, the coupon rate was set at 5.64395% for the March 2, 2026 distribution date, which was based on the 3-month CME Term SOFR rate as of November 26, 2025 of 3.79234% plus 0.26161% spread adjustment plus 1.59%.

CTB sold the guaranteed portion of a loan in a transaction that did not meet the accounting requirements to qualify for recognition as a sold loan.  The gross amount of the loan is recognized in the loan portfolio as an earning asset and the sold portion is recognized as a loan related borrowing.  Repayment of the liability will be provided by the loan payments made by the loan customer.  The principal amount is also guaranteed by the USDA.