Leases

12 Months Ended

Dec. 31, 2021

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 remaining lease terms of 1 year to 45 years, some of which include options to extend the leases for up to 5 years. We evaluated the original lease terms for each operating lease, some of which include options to extend the leases for up to 5 years, using hindsight. 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.

The components of lease expense for the year ended December 31, 2021 were as follows:

(in thousands)	Year Ended December 31, 2021		Year Ended December 31, 2020
Finance lease cost:
Amortization of right-of-use assets – finance leases	$	52	$	50
Interest on lease liabilities – finance leases		55		53
Total finance lease cost		107		103

Short-term lease cost		181		294
Operating lease cost		1,760		1,769

Sublease income		253		253

Total lease cost	$	1,795	$	1,913

Supplemental cash flow information related to CTBI’s operating and finance leases for the year ended December 31, 2021 was as follows:

(in thousands)	Year Ended December 31, 2021			Year Ended December 31, 2020
Finance lease – operating cash flows	$	53		$	53
Finance lease – financing cash flows	$	19		$	15
Operating lease – operating cash flows (fixed payments)	$	1,693		$	1,682
Operating lease – operating cash flows (liability reduction)	$	948		$	1,198
New right-of-use assets – operating leases	$	0		$	0
Weighted average lease term – financing leases	24.02 years			25.02 years
Weighted average lease term – operating leases	13.39 years			13.46 years
Weighted average discount rate – financing leases		3.70	%		3.70	%
Weighted average discount rate – operating leases		3.11	%		3.43	%

Maturities of lease liabilities as of December 31, 2021 are as follows:

(in thousands)	Operating Leases			Finance Leases
2022	$	1,723		$	75
2023		1,634			75
2024		1,313			75
2025		1,121			75
2026		1,078			82
Thereafter		7,459			1,830
Total lease payments		14,328			2,212
Less imputed interest		(2,745	)		(790	)
Total	$	11,583		$	1,422

Maturities of lease liabilities as of December 31, 2020 are as follows:

(in thousands)	Operating Leases			Finance Leases
2021	$	1,717		$	75
2022		1,703			75
2023		1,626			75
2024		1,313			75
2025		1,121			75
Thereafter		8,528			1,913
Total lease payments		16,008			2,288
Less imputed interest		(3,477	)		(847	)
Total	$	12,531		$	1,441