Stock-Based Compensation

9 Months Ended

Sep. 30, 2011

Notes to Financial Statements [Abstract]

Note 2 - Stock-Based Compensation

CTBI's compensation expense related to stock option grants was $72 thousand and $324 thousand for the nine months ended September 30, 2011 and 2010, respectively. Restricted stock expense for the first nine months of 2011 and 2010 was $517 thousand and $273 thousand, respectively. As of September 30, 2011, 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 1.6 years and a total of $1.8 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 2.7 years.

There were no shares of restricted stock granted during the three months ended September 30, 2011, and 45,542 shares granted during the nine months ended September 30, 2011. The restrictions on the restricted stock will lapse at the end of five years. However, in the event of a change in control of CTBI or the death of the participant, the restrictions will lapse. In the event of the disability of the participant, the restrictions will lapse on a pro rata basis (with respect to 20% of the participant's restricted stock for each year since the date of award). 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 no options granted to purchase shares of CTBI common stock during the three or nine months ended September 30, 2011. There were options to purchase 4,525 shares of CTBI common stock and 44,996 shares of restricted stock granted during the nine months ended September 30, 2010.

The fair values of options granted during the nine months ended September 30, 2010, 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
	2010
Expected dividend yield		4.78	%
Risk-free interest rate		3.14	%
Expected volatility		39.12	%
Expected term (in years)		7.5
Weighted average fair value of options	$	6.53