Stock-Based Compensation

6 Months Ended

Jun. 30, 2016

Stock-Based Compensation [Abstract]

Stock-Based Compensation

Note 2 – Stock-Based Compensation

CTBI’s compensation expense related to stock option grants was $15 thousand and $10 thousand, respectively, for the three months ended June 30, 2016 and 2015, and $28 thousand and $18 thousand, respectively for the six months ended June 30, 2016 and 2015.  Restricted stock expense for the three months ended June 30, 2016 and 2015 was $97 thousand and $180 thousand, respectively, including $9 thousand and $20 thousand in dividends paid for each period.  Restricted stock expense for the six months ended June 30, 2016 and 2015 was $207 thousand and $369 thousand, respectively, including $18 thousand and $39 thousand in dividends.  As of June 30, 2016, there was a total of $0.2 million 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 3.8 years and a total of $0.8 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 3.0 years.

There were 18,069 and 10,582 shares of restricted stock granted during the six months ended June 30, 2016 and 2015, respectively.  No shares of restricted stock were granted during the three months ended June 30, 2016 and 2015.  The restricted stock granted in 2016 was issued pursuant to the terms of CTBI’s 2015 Stock Ownership Incentive Plan.  The restrictions on the restricted stock granted in 2016 will lapse ratably over four years.  However, in the event of certain participant employee termination events occurring within 24 months of a change in control of CTBI or the death of the participant, the restrictions will lapse, and in the event of the participant’s disability, the restrictions will lapse on a pro rata basis.  The Compensation Committee will have discretion to review and revise restrictions applicable to a participant’s restricted stock in the event of the participant’s retirement.  The restricted stock granted in 2015 was issued pursuant to the terms of the 2006 Stock Ownership Incentive Plan.  The restrictions on the restricted stock granted in 2015 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 and 20,000 stock options granted during the six months ended June 30, 2016 and 2015.  No stock options were granted during the three months ended June 30, 2016 and 2015.  The fair value of stock options granted during the six months ended June 30, 2016 and 2015 were established at the date of grant using a Black-Scholes option pricing model with the weighted average assumptions as follows:

	Six Months Ended June 30
	2016			2015
Expected dividend yield		3.72	%		3.72	%
Risk-free interest rate		1.45	%		1.54	%
Expected volatility		30.77	%		30.77	%
Expected term (in years)		7.0			7.0
Weighted average fair value of options	$	6.80		$	6.60