Stock-Based Compensation

9 Months Ended

Sep. 30, 2014

Stock-Based Compensation [Abstract]

Stock-Based Compensation

Note 2 – Stock-Based Compensation

CTBI’s compensation expense related to stock option grants was $3 thousand and $2 thousand, respectively for the three months ended September 30, 2014 and 2013 and $8 thousand and $7 thousand, respectively, for the nine months ended September 30, 2014 and 2013.  Restricted stock expense for the three months ended September 30, 2014 and 2013 was $202 thousand and $161 thousand, respectively, including $30 thousand and $31 thousand in dividends paid for each period.  Restricted stock expense for the nine months ended September 30, 2014 and 2013 was $540 thousand and $491 thousand, respectively, including $90 thousand and $93 thousand in dividends.  As of September 30, 2014, there was a total of $77 thousand of unrecognized compensation expense related to unvested stock option awards that will be recognized as expense as the awards vest over a weighted average period of 4.5 years and a total of $1.0 million of unrecognized compensation expense related to restricted stock grants that will be recognized as expense as the awards vest over a weighted average period of 1.5 years.

There were no shares of restricted stock granted during the three months ended September 30, 2014 or 2013.  There were 4,572 and 11,904 shares of restricted stock granted during the nine months ended September 30, 2014 and 2013, respectively.  The restrictions on the restricted stock lapse ratably over four years or in the event of a change in control of CTBI or the death of the participant.  In the event of the disability of the participant, the restrictions will lapse on a pro rata basis.  The Compensation Committee of the Board of Directors will have discretion to review and revise restrictions applicable to a participant’s restricted stock in the event of the participant’s retirement.  There were 10,000 options granted to purchase shares of CTBI common stock during the three and nine months ended September 30, 2014.  There were no options granted during the three months ended September 30, 2013, but 1,650 options were granted during the nine months ended September 30, 2013.

The fair value of options granted during the nine months ended September 30, 2014 and 2013 were established at the date of grant using a Black-Scholes option pricing model with the weighted average assumptions as follows:

	Nine Months Ended
	September 30
	2014			2013
Expected dividend yield		3.40	%		3.74	%
Risk-free interest rate		2.01	%		1.33	%
Expected volatility		30.77	%		39.11	%
Expected term (in years)		7.0			7.5
Weighted average fair value of options	$	7.76		$	8.23