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STOCK-BASED COMPENSATION
 12 Months Ended
Dec. 31, 2023
STOCK-BASED COMPENSATION [Abstract]  
STOCK-BASED COMPENSATION
NOTE 16 – STOCK-BASED
.
COMPENSATION
The Omnibus Plan, which
 
is effective until May 24,
 
2026, provides for equity-based
 
and non-equity-based compensation incentives
(the
 
“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,
 
2023, there
 
were
3,153,621
 
authorized shares
 
of common
stock
 
available
 
for
 
issuance
 
under
 
the
 
Omnibus
 
Plan.
 
The
 
Corporation’s
 
Board
 
of
 
Directors,
 
based
 
on
 
the
 
recommendation
 
of
 
the
Compensation and Benefits
 
Committee of the
 
Board, 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
 
fair
 
value
 
of
 
the
 
shares
 
of
 
restricted
 
stock
 
granted
 
was
 
based
 
on
 
the
 
market
 
price
 
of
 
the
 
Corporation’s
common
 
stock on
 
the date
 
of the
 
respective grant.
 
The shares
 
of restricted
 
stocks granted
 
to employees
 
are subject
 
to the
 
following
vesting period:
 
fifty percent
 
(
50
%) of
 
those shares
 
vest on
 
the two-year
 
anniversary of
 
the grant
 
date and
 
the remaining
50
% vest
 
on
the three-year
 
anniversary of
 
the grant
 
date. The
 
shares of
 
restricted stock
 
granted to
 
directors are
 
generally subject
 
to vesting
 
on the
one-year
 
anniversary
 
of
 
the
 
grant
 
date.
 
The
 
Corporation
 
issued
522,801
 
shares
 
during
 
the
 
year
 
ended
 
December
 
31,
 
2023
 
in
connection with restricted stock awards, which were reissued from
 
treasury shares.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
The following table summarizes the restricted stock activity under the Omnibus
 
Plan during the years ended December 31, 2023,
2022 and 2021:
Year Ended December 31,
 
2023
2022
2021
Number of
Weighted-
Number of
Weighted-
Number of
Weighted-
shares of
Average
shares of
Average
shares of
Average
restricted
Grant Date
restricted
Grant Date
restricted
Grant Date
stock
 
Fair Value
stock
 
Fair Value
stock
 
Fair Value
Unvested shares outstanding at beginning of year
938,491
$
9.14
1,148,775
$
6.61
1,320,723
$
5.74
Granted (1)
522,801
12.07
327,195
13.21
324,360
11.47
Forfeited
(63,133)
11.36
(15,108)
8.79
(82,486)
6.42
Vested
(508,517)
6.36
(522,371)
6.13
(413,822)
7.69
Unvested shares outstanding at end of year
889,642
$
12.30
938,491
$
9.14
1,148,775
$
6.61
(1)
For the year ended December 31, 2023, includes
28,793
 
shares of restricted stock awarded to independent directors and
494,008
 
shares of restricted stock awarded to employees, of
which
33,718
 
shares were granted to retirement-eligible employees and
 
thus charged to earnings as of the grant date. For the
 
year ended December 31, 2022, includes
27,529
 
shares of
restricted stock awarded to independent directors and
299,666
 
shares of restricted stock awarded to employees, of which
6,084
 
shares were granted to retirement-eligible employees and
thus charged to earnings as of the grant date. For the
 
year ended December 31, 2021, includes
29,291
 
shares of restricted stock awarded to independent directors
 
and
295,069
 
shares of
restricted stock awarded to employees, of which
19,804
 
shares were granted to retirement-eligible employees and
 
thus charged to earnings as of the grant date.
For the
 
years ended
 
December 31,
 
2023, 2022
 
and 2021,
 
the Corporation
 
recognized
 
$
5.7
 
million, $
3.7
 
million and
 
$
3.5
 
million,
respectively,
 
of
 
stock-based
 
compensation
 
expense
 
related
 
to
 
restricted
 
stock
 
awards.
 
As
 
of
 
December
 
31,
 
2023,
 
there
 
was
 
$
4.1
million of total unrecognized compensation cost related to
 
unvested shares of restricted stock that the Corporation expects to recognize
over a weighted average period of
1.6
 
years.
Performance Units
Under the Omnibus Plan, the Corporation may award
 
performance units to participants, with each unit representing
 
the value of one
share
 
of
 
the
 
Corporation’s
 
common
 
stock.
These awards, which are granted to executives, do not contain non-forfeitable rights to
dividend equivalent amounts and can only be settled in shares of the Corporation’s common stock.
 
On March 16, 2023, the Corporation granted 216,876 performance units to executives. Performance units granted on March 16,
2023 will vest on the third anniversary of the effective date of the award based on actual achievement of two performance metrics
weighted equally: relative total shareholder return (“Relative TSR”), compared to companies that comprise the KBW Nasdaq
Regional Banking Index, and the achievement of a tangible book value per share (“TBVPS”) goal, which is measured based upon the
growth in the tangible book value during the performance cycle, adjusted for certain allowable non-recurring transactions. The
participant may earn 50% of their target opportunity for threshold level performance and up to 150% of their target opportunity for
maximum level performance, based on the individual achievement of each performance goal during a three-year performance cycle.
Amounts between threshold, target and maximum performance will vest in a proportional amount. Performance units granted prior to
March 16, 2023 vest subject only to achievement of a TBVPS goal and the participant may earn only up to 100% of their target
opportunity.
 
The following table summarizes the
 
performance units activity under
 
the Omnibus Plan during the
 
years ended December 31, 2023,
2022 and 2021:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Year Ended
 
December 31,
 
2023
2022
2021
Number
 
Weighted-
Number
 
Weighted-
Number
 
Weighted-
of
Average
of
Average
of
Average
Performance
Grant Date
Performance
Grant Date
Performance
Grant Date
Units
Fair Value
Units
Fair Value
Units
Fair Value
Performance units at beginning of year
791,923
$
7.36
814,899
$
7.06
1,006,768
$
6.16
Additions
(1)
216,876
12.24
166,669
13.15
160,485
11.26
Vested
(2)
(474,538)
4.08
(189,645)
11.16
(304,408)
6.29
Forfeited
-
-
-
-
(47,946)
7.08
Performance units at end of year
534,261
$
12.25
791,923
$
7.36
814,899
$
7.06
(1)
Units granted during 2023 are subject to the achievement of the Relative TSR and TBVPS performance goals during a three-year performance cycle beginning January 1, 2023 and ending on December 31, 2025. Units
granted during 2022 are subject to the achievement of the TBVPS performance goal during a three-year performance cycle beginning January 1, 2022 and ending on December 31, 2024. Units granted during 2021 are
subject to the achievement of the TBVPS performance goal during a three-year performance cycle beginning January 1, 2021 and ending on December 31, 2023.
(2)
Units vested during 2023 and 2022 are related to performance units granted in 2020 and 2019, respectively, that met certain pre-established targets and were settled with shares of common stock reissued from treasury
shares. Units vested during 2021 are related to performance units granted in 2018 that met certain pre-established targets and were settled with new shares of common stock.
The fair value of the performance units awarded during the years ended December 31, 2023, 2022 and 2021, that was based on the
TBVPS goal component, was calculated based on the market price of the Corporation’s common stock on the respective date of the
grant and assuming attainment of 100% of target opportunity. As of December 31, 2023, there have been no changes in management’s
assessment of the probability that the pre-established TBVPS goal will be achieved; as such, no cumulative adjustment to
compensation expense has been recognized. The fair value of the performance units awarded during 2023, that was based on the
Relative TSR component, was calculated using a Monte Carlo simulation. Since the Relative TSR component is considered a market
condition, the fair value of the portion of the award based on Relative TSR is not revised subsequent to grant date based on actual
performance.
The following
 
table summarizes
 
the valuation
 
assumptions used
 
to calculate
 
the fair
 
value of
 
the Relative
 
TSR component
 
of the
performance units granted under the Omnibus Plan during 2023:
 
 
 
 
 
 
 
 
Year
 
Ended
December 31,
 
2023
Risk-free interest rate
(1)
3.98
%
Correlation coefficient
77.16
Expected dividend yield
(2)
-
Expected volatility
(3)
41.37
Expected life (in years)
2.79
(1)
Based on the yield on zero-coupon U.S. Treasury
 
Separate Trading of Registered Interest and
 
Principal of Securities as of the grant date.
(2)
Assumes that dividends are reinvested at each ex-dividend date.
(3)
Calculated based on the historical volatility of the Corporation's
 
stock price with a look-back period equal to the simulation
 
term using daily stock prices.
For the
 
years ended
 
December 31,
 
2023, 2022
 
and 2021,
 
the Corporation
 
recognized $
2.1
 
million, $
1.7
 
million and
 
$
2.0
 
million,
respectively,
 
of stock-based
 
compensation expense
 
related to performance
 
units. As of
 
December 31,
 
2023, there
 
was $
3.0
 
million of
total unrecognized compensation
 
cost related to unvested
 
performance units that the Corporation
 
expects to recognize over
 
a weighted
average period of
1.8
 
years.
Shares withheld
During 2023,
 
the Corporation
 
withheld
289,623
 
shares (2022
 
–
205,807
 
shares; 2021
 
–
214,374
 
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.