Leases

12 Months Ended

Dec. 31, 2024

15. Leases

CTBI has one finance lease for property but no material sublease or leasing arrangements for which it is the lessor of property or equipment. CTBI has operating leases for banking and ATM locations. These leases have original remaining lease terms of 1 year to 45 years, some of which include options to renew the leases for up to 5 years. These options, some of which include variable costs related to rent escalations based on recent financial indices, such as the Consumer Price Index, where CTBI estimates future rent increases, are included in the calculation of the lease liability and right-of-use asset when management determines it is reasonably certain the option will be exercised. CTBI determines this on each lease by considering all relevant contract-based, asset-based, market-based, and entity-based economic factors. Right-of-use assets and lease liabilities are recognized at lease commencement based on the present value of the remaining lease payments using a discount rate that represents our incremental borrowing rate, on a collateralized basis, over a similar term, at the lease commencement date. Right-of-use assets are further adjusted for prepaid rent, lease incentives, and initial direct costs, if any.

The components of lease expense for the years ended December 31, 2024 and 2023 were as follows:

(in thousands)	Year Ended December 31, 2024			Year Ended December 31, 2023
Finance lease cost:
Amortization of right-of-use assets – finance leases	$	124		$	166
Interest on lease liabilities – finance leases		158			118
Total finance lease cost		282			284

Short-term lease cost		98			92

Operating lease cost		1,880			1,888

Total lease cost		2,260			2,264

Sublease income		(282	)		(273	)

Net lease cost	$	1,978		$	1,991

Supplemental cash flow information related to CTBI’s operating and finance leases for the years ended December 31, 2024 and 2023 was as follows:

(in thousands)	Year Ended December 31, 2024			Year Ended December 31, 2023
Finance lease – operating cash flows	$	130		$	128
Finance lease – financing cash flows	$	0		$	33
Operating lease – operating cash flows (fixed payments)	$	1,893		$	1,889
Operating lease – operating cash flows (liability reduction)	$	1,495		$	1,455
New right-of-use assets – operating leases	$	0		$	358
New right-of-use assets – finance leases	$	0		$	0

Weighted average lease term – financing leases	25.16 years			26.12 years
Weighted average lease term – operating leases	13.13 years			13.20 years
Weighted average discount rate – financing leases		4.91	%		4.90	%
Weighted average discount rate – operating leases		3.57	%		3.56	%

Maturities of lease liabilities as of December 31, 2024 are as follows:

(in thousands)	Operating Leases			Finance Leases
2025	$	1,790		$	157
2026		1,782			167
2027		1,672			174
2028		1,314			179
2029		826			183
Thereafter		7,535			5,887
Total lease payments		14,919			6,747
Less imputed interest		(3,168	)		(3,308	)
Total	$	11,751		$	3,439

Maturities of lease liabilities as of December 31, 2023 are as follows:

(in thousands)	Operating Leases			Finance Leases
2024	$	1,877		$	154
2025		1,782			159
2026		1,774			170
2027		1,656			174
2028		1,257			179
Thereafter		8,137			6,070
Total lease payments		16,483			6,906
Less imputed interest		(3,525	)		(3,471	)
Total	$	12,958		$	3,435