Leases

12 Months Ended

Dec. 31, 2023

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.

The components of lease expense for the years ended December 31, 2023 and 2022 were as follows:

(in thousands)	Year Ended December 31, 2023			Year Ended December 31, 2022
Finance lease cost:
Amortization of right-of-use assets – finance leases	$	166		$	64
Interest on lease liabilities – finance leases		118			70
Total finance lease cost		284			134

Short-term lease cost		92			85

Operating lease cost		1,888			1,838

Total lease cost		2,264			2,057

Sublease income		(273	)		(249	)

Net lease cost	$	1,991		$	1,808

Supplemental cash flow information related to CTBI’s operating and finance leases for the years ended December 31, 2023 and 2022 was as follows:

(in thousands)	Year Ended December 31, 2023			Year Ended December 31, 2022
Finance lease – operating cash flows	$	128		$	67
Finance lease – financing cash flows	$	33		$	24
Operating lease – operating cash flows (fixed payments)	$	1,889		$	1,760
Operating lease – operating cash flows (liability reduction)	$	1,455		$	1,424
New right-of-use assets – operating leases	$	358		$	3,469
New right-of-use assets – finance leases	$	0		$	2,070

Weighted average lease term – financing leases	26.12 years			27.10 years
Weighted average lease term – operating leases	13.20 years			13.84 years
Weighted average discount rate – financing leases		4.90	%		4.90	%
Weighted average discount rate – operating leases		3.56	%		3.55	%

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

Maturities of lease liabilities as of December 31, 2022 are as follows:

(in thousands)	Operating Leases			Finance Leases
2023	$	1,878		$	151
2024		1,853			155
2025		1,748			160
2026		1,731			171
2027		1,620			175
Thereafter		9,393			6,362
Total lease payments		18,223			7,174
Less imputed interest		(4,063	)		(3,706	)
Total	$	14,160		$	3,468