XML 43 R30.htm IDEA: XBRL DOCUMENT v3.22.0.1
STOCK-BASED COMPENSATION
 12 Months Ended
Dec. 31, 2021
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]  
STOCK-BASED COMPENSATION [Text Block]
NOTE 22 –
 
STOCK-BASED
 
COMPENSATION
On
 
May
 
24,
 
2016,
 
the
 
Corporation’s
 
stockholders
 
approved
 
the
 
amendment
 
and
 
restatement
 
of
 
the
 
First
 
BanCorp.
 
Omnibus
Incentive
 
Plan, as
 
amended (the
 
“Omnibus Plan”),
 
to, among
 
other things,
 
increase the
 
number of
 
shares of
 
common stock
 
reserved
for issuance under
 
the Omnibus Plan,
 
extend the term
 
of the Omnibus
 
Plan to May
 
24, 2026, and
 
re-approve the material
 
terms of the
performance
 
goals under
 
the Omnibus
 
Plan for
 
purposes of
 
the then-effective
 
Section 162(m)
 
of the
 
U.S. Internal
 
Revenue Code
 
of
1986,
 
as
 
amended.
 
The
 
Omnibus
 
Plan
 
provides
 
for
 
equity-based
 
and
 
non
 
equity-based
 
compensation
 
incentives
 
(the
 
“awards”)
through the
 
grant of
 
stock options,
 
stock appreciation
 
rights, restricted
 
stock, restricted
 
stock units,
 
performance shares,
 
other stock-
based awards,
 
and cash-based
 
awards. The
 
Omnibus Plan
 
authorizes the
 
issuance of up
 
to
14,169,807
 
shares of common
 
stock, subject
to adjustments
 
for stock
 
splits,
 
reorganizations
 
and other
 
similar
 
events.
 
As of December
 
31, 2021,
 
there were
4,308,921
 
authorized shares
of common stock available for issuance
 
under the Omnibus Plan. The Corporation’s
 
Board of Directors, based on the recommendation
of the Corporation’s
 
Compensation and Benefits Committee,
 
has the power and authority to
 
determine those eligible to receive
 
awards
and to
 
establish the
 
terms and conditions
 
of any
 
awards, subject
 
to various
 
limits and
 
vesting restrictions
 
that apply
 
to individual
 
and
aggregate awards.
Restricted Stock
Under the Omnibus Plan, the
 
Corporation may grant restricted stock to plan participants, subject to forfeiture upon the occurrence of
certain events
 
until the dates specified
 
in the participant’s award
 
agreement. While
 
the restricted
 
stock is subject to forfeiture
 
and does not
contain non-forfeitable
 
dividend rights,
 
participants
 
may exercise full voting
 
rights with respect
 
to the shares of restricted
 
stock granted to
them.
 
The restricted stock granted under the Omnibus Plan is typically subject to a vesting period. During the year ended December 31,
2021, the Corporation awarded
 
to its independent directors
29,291
 
shares of restricted stock that are subject to
one-year
 
vesting from the
dates of
 
grant. In
 
addition, during the
 
year
 
ended December
 
31,
 
2021, the
 
Corporation awarded
295,069
 
shares of
 
restricted stock
 
to
employees;
 
fifty percent
 
(
50
%) of those shares
 
vest on the
 
two-year
 
anniversary
 
of the grant
 
date and the
 
remaining
50
% vest on three-year
anniversary of
 
the
 
grant
 
date.
 
Included in
 
those
295,069
 
shares of
 
restricted stock
 
were
19,804
 
shares
 
granted to
 
retirement-eligible
employees.
 
The total expense
 
determined
 
for the restricted
 
stock awarded
 
to retirement-eligible
 
employees
 
was charged against
 
earnings
 
as
of
 
the
 
grant date.
 
During the
 
year
 
ended December
 
31,
 
2020,
 
the
 
Corporation awarded to
 
its
 
independent directors
59,797
 
shares of
restricted stock that are
 
subject to
one-year
 
vesting from the dates
 
of grant. In
 
addition, during 2020, the Corporation awarded
851,673
shares of
 
restricted stock to
 
employees; fifty percent (
50
%)
 
of those
 
shares vest on
 
the two-year anniversary of
 
the grant
 
date and
 
the
remaining
50
% vest on
 
three-year anniversary
 
of the grant date. Included in
 
those
851,673
 
shares of restricted stock were
47,194
 
shares
granted to retirement-eligible
 
employees.
 
The fair value
 
of the shares
 
of restricted
 
stock granted
 
in 2021 and 2020
 
was based on
 
the market
price of
 
the Corporation’s
 
outstanding
 
common stock
 
on the date
 
of the respective
 
grant.
The following table summarizes the restricted stock activity in the year ended
 
December 31, 2021 under the Omnibus Plan:
2021
Number of
Weighted-
shares of
Average
restricted
Grant Date
stock
 
Fair Value
Unvested shares outstanding at beginning of year
1,320,723
$
5.74
Granted
324,360
11.47
Forfeited
(82,486)
6.42
Vested
(413,822)
7.69
Unvested shares outstanding at end of year
1,148,775
$
6.61
For the
 
years ended
 
December 31,
 
2021, 2020
 
and 2019,
 
the Corporation
 
recognized $
3.5
 
million, $
3.2
 
million, and
 
$
2.8
 
million,
respectively,
 
of
 
stock-based
 
compensation
 
expense
 
related
 
to
 
restricted
 
stock
 
awards.
 
As
 
of
 
December
 
31,
 
2021,
 
there
 
was
 
$
3.3
million
 
of
 
total
 
unrecognized
 
compensation
 
cost
 
related
 
to
 
unvested
 
shares
 
of
 
restricted
 
stock.
 
The
 
weighted
 
average
 
period
 
over
which the Corporation expects to recognize such cost was
1.4
 
years as of December 31, 2021.
 
Stock-based compensation
 
accounting guidance
 
requires the
 
Corporation to
 
reverse compensation
 
expense for
 
any awards
 
that are
forfeited due
 
to employee
 
or director
 
turnover.
 
Changes in
 
the estimated
 
forfeiture rate
 
may have
 
a significant
 
effect on
 
stock-based
compensation,
 
as the
 
Corporation
 
recognizes
 
the
 
effect
 
of adjusting
 
the rate
 
for
 
all expense
 
amortization
 
in the
 
period
 
in
 
which
 
the
forfeiture estimate is changed. If the actual forfeiture
 
rate is higher than the estimated forfeiture rate, an
 
adjustment is made to increase
the
 
estimated
 
forfeiture
 
rate,
 
which
 
will
 
decrease
 
the
 
expense
 
recognized
 
in
 
the
 
financial
 
statements.
 
If
 
the
 
actual
 
forfeiture
 
rate
 
is
lower
 
than
 
the
 
estimated
 
forfeiture
 
rate,
 
an
 
adjustment
 
is
 
made
 
to
 
decrease
 
the
 
estimated
 
forfeiture
 
rate,
 
which
 
will
 
increase
 
the
expense recognized in the financial statements.
Performance Units
Under the
 
Omnibus Plan,
 
the Corporation
 
may award
 
performance
 
units to
 
Omnibus Plan
 
participants.
 
During the
 
year ended
 
December
31, 2021,
 
the Corporation granted
160,485
 
units to
 
executives, with each unit
 
representing the value of
 
one share
 
of the
 
Corporation’s
common stock. The performance
 
units granted in the year ended
 
December 31, 2021 are for the performance
 
period beginning
 
January 1,
2021 and ending on December
 
31, 2023.
These awards do not contain non-forfeitable rights to dividend equivalent amounts and can only
be settled in shares of the Corporation’s common stock. The performance units will vest on the third anniversary of the effective date of the
awards, subject to the achievement of a pre-established tangible book value per share target as of December 31, 2023. All the performance
units will vest if performance is at the pre-established performance target level or above. However, the participants may vest with respect
to 50% of the awards to the extent that performance is below the target but not less than 80% of the pre-established performance target level
(the “80% minimum threshold”), which is measured based upon the growth in the tangible book value during the performance cycle. If
performance is between the 80% minimum threshold and the pre-established performance target level, the participants will vest on a
proportional amount. No performance units will vest if performance is below the 80% minimum threshold.
During
 
the
 
years
 
ended
 
December
 
31,
 
2020
 
and
 
2019,
 
the
 
Corporation
 
awarded
502,307
 
and
200,053
 
performance
 
units
 
to
executives,
 
respectively.
 
The performance units will vest
 
on the third anniversary
 
of the effective date
 
of the awards and are
 
subject to
a pre-established performance target level as described
 
above.
The following table summarizes the performance units activity during
 
2021 under the Omnibus Plan:
Year
 
Ended
(Number of units)
December 31,
 
2021
Performance units at beginning of year
1,006,768
Additions
160,485
Vested
(304,408)
Forfeited
(47,946)
Performance units as of December 31, 2021
814,899
The fair values
 
of the performance
 
units awarded
 
were based
 
on the market
 
price of the
 
Corporation’s
 
outstanding
 
common stock
 
on the
respective date of
 
the grant.
 
For
 
the years
 
ended December 31,
 
2021, 2020,
 
and 2019,
 
the Corporation recognized $
2.0
 
million, $
1.8
million, and
 
$
1.1
 
million,
 
respectively,
 
of stock-based
 
compensation
 
expense related
 
to performance
 
units. As of
 
December
 
31, 2021, there
was $
2.2
 
million of total unrecognized
 
compensation
 
cost related to unvested
 
performance
 
units that the Corporation
 
expects to recognize
over the next three years. The total
 
amount of compensation
 
expense recognized
 
reflects management’s
 
assessment of the probability
 
that
the pre-established
 
performance
 
goal will
 
be achieved.
 
The Corporation
 
will recognize
 
a cumulative
 
adjustment
 
to compensation
 
expense
 
in
the then-current
 
period to
 
reflect
 
any changes
 
in the
 
probability
 
of achievement
 
of the performance
 
goals.
Other awards
Under the Omnibus Plan, the Corporation
 
may grant shares of unrestricted
 
stock to plan participants.
 
During the third quarter of 2020,
the Corporation
 
granted to its independent
 
directors
19,157
 
shares of unrestricted
 
stock that were fully
 
vested at the time of the grant
 
date.
For
 
the
 
year
 
ended
 
December
 
31,
 
2020,
 
the
 
Corporation recognized
 
$
0.1
 
million
 
of
 
stock-based compensation
 
expense
 
related
 
to
unrestricted
 
stock awards.
 
There were
no
 
grants
 
of unrestricted
 
stock in
 
2021 and
 
2019.
Shares withheld
During the
 
year ended
 
December 31,
 
2021, the
 
Corporation withheld
214,374
 
shares (2020
 
–
51,814
 
shares) of the
 
restricted stock
that vested
 
during
 
such period
 
to cover
 
the officers’
 
payroll and
 
income tax
 
withholding liabilities;
 
these shares
 
are held
 
as treasury
shares. The Corporation
 
paid in cash any fractional
 
share of salary stock
 
to which an officer
 
was entitled. In the
 
consolidated financial
statements, the Corporation presents shares withheld for tax purposes as common
 
stock repurchases.