New
Accounting Standards –
➢ FASB
Issues Standard that Enhances Income Tax Disclosures – On January 1, 2025, CTBI adopted Accounting Standards Update (“ASU”) No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures
on a prospective basis. This ASU requires, among other things, greater disaggregation of information in the income tax rate reconciliation and for paid income taxes to be disaggregated by jurisdiction. The amendments in this ASU did not have an
effect on our financial condition or results of operation. We have expanded our disclosures in the Income Taxes footnote (note 17) below accordingly.
➢ FASB Issues Improvement to Income Statement Expense Disclosures – In November 2024, the
Financial Accounting Standards Board (“FASB”) issued ASU No. 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement
Expenses to improve the disclosures about a public business entity’s expenses and address investor requests for more detailed information about the types of expenses (including purchases of inventory, employee compensation, depreciation,
amortization, and depletion) in commonly presented expense captions. ASU No. 2024-03 is effective for fiscal years beginning after December 15, 2026, and interim periods beginning after December 15, 2027. Early adoption is permitted. The
amendments in this update should be applied either prospectively to financial statements issued for reporting periods after the effective date of this update, or retrospectively to any or all prior periods presented in the financial statements.
CTBI does not expect ASU 2024-03 to have a material impact on CTBI’s financial statements.
➢ FASB Issues New Guidance on Purchased Loans – In November 2025, the FASB issued ASU 2025-08
Financial Instruments – Credit Losses (Topic 326): Purchased Loans in response to stakeholders’ concerns about the accounting for acquired financial assets in accordance with ASC 326. The ASU amends
the current expected credit loss (CECL) model in ASC 326-20 to: (1) expand the population of acquired financial assets subject to the “gross-up approach” for measuring credit losses to apply to “seasoned” purchased loans. This approach allows
entities to avoid recording a day-one credit loss expense in profit or loss but also reduces interest income recognized in later periods and (2) introduce criteria for determining whether a purchased loan is considered “seasoned” and will be
accounted for using the gross-up approach. The amendments will be effective for interim and annual periods beginning after December 15, 2026, with early adoption allowed for financial statements that have not yet been issued or made available
for issuance. This ASU has no impact on CTBI’s financial statements at this time.
About New Standards Disclosures
New accounting standards disclosures describe recently adopted pronouncements and those not yet effective, along with management's assessment of their expected impact. This section provides an early warning system for upcoming changes to how a company reports its financial results, often years before the new rules take effect.
Key signals: when management describes a not-yet-adopted standard's impact as "material" or "still being evaluated," it signals potential significant changes to reported metrics upon adoption. Watch for standards that affect a company's core operations — for example, revenue recognition changes for software companies or lease accounting changes for retailers with large store footprints. The transition method chosen (full retrospective versus modified retrospective) affects comparability with prior periods. Companies that delay adoption to the latest permitted date may be struggling with implementation complexity. Compare the disclosed impact assessments against peers in the same industry to gauge whether management's expectations are reasonable.