Stock-Based Compensation

6 Months Ended

Jun. 30, 2017

Stock-Based Compensation [Abstract]

Stock-Based Compensation

Note 2 – Stock-Based Compensation

CTBI’s compensation expense related to stock option grants was $14 thousand and $15 thousand, respectively, for the three months ended June 30, 2017 and 2016, and $28 thousand for both the six months ended June 30, 2017 and 2016.  Restricted stock expense for the three months ended June 30, 2017 and 2016 was $142 thousand and $97 thousand, respectively, including $13 thousand and $9 thousand in dividends paid for each period.  Restricted stock expense for the six months ended June 30, 2017 and 2016 was $274 thousand and $207 thousand, respectively, including $27 thousand and $18 thousand in dividends paid for each period.  As of June 30, 2017, there was a total of $0.1 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 2.8 years and a total of $1.5 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 3.3 years.

There were no shares of restricted stock granted during three months ended June 30, 2017 and 2016.  There were 23,668 and 18,069 shares of restricted stock granted during the six months ended June 30, 2017 and 2016, respectively.  The restricted stock was issued pursuant to the terms of CTBI’s 2015 Stock Ownership Incentive Plan.  The restrictions on the restricted stock will lapse ratably over four years, except for a 5,000 management retention restricted stock award granted in 2017 which will cliff vest at the end of five 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.

There were no stock options granted in the first six months of 2017.  There were 10,000 stock options granted during the six months ended June 30, 2016.  The fair value of stock options granted during the six months ended June 30, 2016 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
Expected dividend yield		3.70	%
Risk-free interest rate		1.45	%
Expected volatility		34.34	%
Expected term (in years)		7.5
Weighted average fair value of options	$	6.82