Employee Benefits

12 Months Ended

Dec. 31, 2019

15. Employee Benefits

CTBI maintains two separate retirement savings plans, a 401(k) Plan and an Employee Stock Ownership Plan (“ESOP”).

The 401(k) Plan is available to all employees (age 21 and over) who are credited with one year of service (12 consecutive month period with at least 1,000 hours). Participants in the plan have the option to contribute from 1% to 20% of their annual compensation. CTBI matches 50% of participant contributions up to 8% of gross pay. CTBI may, at its discretion, contribute an additional percentage of covered employees’ compensation. CTBI’s matching contributions were $1.1 million for the years ended December 31, 2019 and 2018, and $1.0 million for the year ended December 31, 2017. The 401(k) Plan owned 424,591, 416,360, and 406,021 shares of CTBI’s common stock at December 31, 2019, 2018, and 2017, respectively. Substantially all shares owned by the 401(k) Plan were allocated to employee accounts on those dates. The market price of the shares at the date of allocation is essentially the same as the market price at the date of purchase.

The ESOP has the same entrance requirements as the 401(k) Plan above. CTBI currently contributes 4% of covered employees’ compensation to the ESOP. The ESOP uses the contributions to acquire shares of CTBI’s common stock. CTBI’s contributions to the ESOP were $1.7 million for the year ended December 31, 2019 and $1.6 million for the years ended December 31, 2018 and 2017. The ESOP owned 738,212, 726,327, and 737,079 shares of CTBI’s common stock at December 31, 2019, 2018, and 2017, respectively. Substantially all shares owned by the ESOP were allocated to employee accounts on those dates. The market price of the shares at the date of allocation is essentially the same as the market price at the date of purchase.

Stock-Based Compensation:

As of December 31, 2019, CTBI maintained one active and one inactive incentive stock ownership plans covering key employees. The 2015 Stock Ownership Incentive Plan (“2015 Plan”) was approved by the Board of Directors and the Shareholders in 2015. The 2006 Stock Ownership Incentive Plan (“2006 Plan”) was approved by the Board of Directors and the Shareholders in 2006. The 2006 Plan was rendered inactive as of April 28, 2015. The 2015 Plan has 550,000 shares authorized, 481,396 of which were available at December 31, 2019. Shares issuable pursuant to awards which were granted under the prior plans on or before their respective expiration or termination dates will be issued from the remaining shares reserved for issuance under the prior plans. The shares of common stock reserved for issuance under the prior plans in excess of the number of shares as to which options or other benefits are awarded thereunder, and any shares as to which options or other benefits granted under the prior plans may lapse, expire, terminate or be canceled, will not be reserved and available for issuance or reissuance under the 2015 Plan. The following table provides detail of the number of shares to be issued upon exercise of outstanding stock-based awards and remaining shares available for future issuance under all of CTBI’s equity compensation plans as of December 31, 2019:

Plan Category (shares in thousands)

Number of

Shares to Be

Issued Upon

Exercise

Weighted

Average

Price

Available for

Future

Issuance

Equity compensation plans approved by shareholders:

Stock options

32.04

481(a

)

Restricted stock

(c)

(b)

(a)

Performance units

(d)

(b)

(a)

Stock appreciation rights (“SARs”)

(e)

(b)

(a)

Total

481

(a)

Under the 2015 Plan, 550,000 shares are authorized for issuance; 72,909 have been issued as of December 31, 2019 In January of 2016, 18,069 restricted stock shares were issued under the terms of the 2015 Plan pursuant to awards granted under the 2006 Plan. Additional shares will not be issued pursuant to awards granted from prior plans.

(b)	Not applicable

(c)	The maximum number of shares of restricted stock that may be granted is 550,000 shares, and the maximum that may be granted to a participant during any calendar year is 75,000 shares.

(d)	No performance units payable in stock had been issued as of December 31, 2019. The maximum payment that can be made pursuant to performance units granted to any one participant in any calendar year is $1,000,000.

(e)	No SARS have been issued. The maximum number of shares with respect to which SARs may be granted to a participant during any calendar year is 100,000 shares.

The following table details the shares available for future issuance under the 2015 Plan at December 31, 2019.

Plan Category	Shares Available for Future Issuance
Shares available at January 1, 2019		508,729
Stock option grants		0
Restricted stock grants		(27,921	)
Forfeitures		588
Shares available for future issuance at December 31, 2019		481,396

There were no stock options granted in 2017, 2018 or 2019.

The 2015 Plan:

CTBI’s stock option activity for the 2015 Plan for the years ended December 31, 2019, 2018, and 2017 is summarized as follows:

December 31	2019				_2018*					2017
	Options		Weighted Average Exercise Price		Options			Weighted Average Exercise Price		Options		Weighted Average Exercise Price
Outstanding at beginning of year		0	$	0		10,000		$	33.55		10,000	$	33.55
Granted		0		0		0			0		0		0
Exercised		0		0		(10,000	)		33.55		0		0
Forfeited/expired		0		0		0			0		0		0
Outstanding at end of year		0	$	0		0		$	0		10,000	$	33.55

Exercisable at end of year		0	$	0		0		$	0		0	$	0

*Pursuant to the 2015 Plan provisions, the death of the option holder accelerated the vesting of 10,000 shares in 2018.

There were no options granted from the 2015 Plan for the years 2019, 2018, or 2017.

The following table shows the intrinsic values of options exercised, exercisable, and outstanding for the 2015 Plan for the years ended December 31, 2019, 2018 and 2017:

(in thousands)	2019		2018		2017
Options exercised	$	0	$	140		0
Options exercisable		0		0		0
Outstanding options		0		0		136

The following table shows restricted stock activity for the 2015 Plan for the years ended December 31, 2019, 2018 and 2017:

December 31	2019					2018					2017
	Grants			Weighted Average Fair Value at Grant		Grants			Weighted Average Fair Value at Grant		Grants			Weighted Average Fair Value at Grant
Outstanding at beginning of year		34,255		$	44.46		33,085		$	41.84		17,496		$	33.55
Granted		27,921			41.12		11,320			49.30		23,668			46.45
Vested		(10,596	)		42.39		(8,761	)		40.46		(5,751	)		35.79
Forfeited		(588	)		43.04		(1,389	)		46.77		(2,328	)		41.31
Outstanding at end of year		50,992		$	43.08		34,255		$	44.46		33,085		$	41.84

The 2006 Plan:

CTBI’s stock option activity for the 2006 Plan for the years ended December 31, 2019, 2018, and 2017 is summarized as follows:

December 31	2019					2018					2017
	Options			Weighted Average Exercise Price		Options			Weighted Average Exercise Price		Options			Weighted Average Exercise Price
Outstanding at beginning of year		32,571		$	32.47		35,376		$	31.90		61,041		$	29.84
Granted		0			0		0			0		0			0
Exercised		(12,076	)		33.19		(2,475	)		25.52		(25,665	)		27.01
Forfeited/expired		0			0		(330	)		23.79		0			0
Outstanding at end of year		20,495		$	32.04		32,571		$	32.47		35,376		$	31.90

Exercisable at end of year		495		$	22.81		2,571		$	25.11		5,376		$	25.22

A summary of the status of CTBI’s 2006 Plan for nonvested options as of December 31, 2019, and changes during the year ended December 31, 2019, is presented as follows:

Nonvested Options	Options		Weighted Average Grant Date Fair Value
Nonvested at January 1, 2019		30,000	$	6.98
Granted		0		0
Vested		10,000		7.76
Forfeited		0		0
Nonvested at December 31, 2019		20,000	$	6.59

The weighted average remaining contractual term in years of the options outstanding at December 31, 2019 was 5.0 years.

There were no options granted from the 2006 Plan for the years 2019 , 2018 and 2017.

The following table shows the intrinsic values of options exercised, exercisable, and outstanding for the 2006 Plan for the years ended December 31, 2019, 2018, and 2017:

(in thousands)	2019		2018		2017
Options exercised	$	135	$	56	$	537
Options exercisable		12		37		118
Outstanding options		299		233		538

The following table shows restricted stock activity for the years ended December 31, 2019, 2018, and 2017:

December 31	2019					2018					2017
	Grants			Weighted Average Fair Value at Grant		Grants			Weighted Average Fair Value at Grant		Grants			Weighted Average Fair Value at Grant
Outstanding at beginning of year		2,064		$	32.27		5,426		$	33.24		11,989		$	32.85
Granted		0			0		0			0		0			0
Vested		(2,064	)	$	32.27		(3,236	)		33.90		(6,214	)		32.48
Forfeited		0			0		(126	)		32.27		(349	)		33.31
Outstanding at end of year		0		$	0.00		2,064		$	32.27		5,426		$	33.24

The following table shows the unrecognized compensation cost related to nonvested share-based compensation arrangements granted under the plans at December 31, 2019, 2018, and 2017 and the total grant-date fair value of shares vested, cash received from option exercises under all share-based payment arrangements, and the actual tax benefit realized for the tax deductions from option exercises of the share-based payment arrangements for the years ended December 31, 2019, 2018, and 2017.

(in thousands)	2019		2018		2017
Unrecognized compensation cost of unvested share-based compensation arrangements granted under the plan at year-end	$	1,410	$	1,072	$	1,242
Grant date fair value of shares vested for the year		605		645		564
Cash received from option exercises under all share-based payment arrangements for the year		401		399		693
Tax benefit realized for the tax deductions from option exercises of the share-based payment arrangements for the year		27		49		138

The unrecognized compensation cost related to nonvested share-based compensation arrangements granted under the plans at December 31, 2019 is expected to be recognized over a weighted-average period of 1.9 years.