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STOCK-BASED COMPENSATION
 3 Months Ended
Mar. 31, 2024
STOCK-BASED COMPENSATION [Abstract]  
STOCK-BASED COMPENSATION
NOTE 12 – STOCK-BASED
.
COMPENSATION
The First Bancorp
 
Omnibus Incentive
 
Plan (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
 
March 31,
 
2024, there
 
were
2,592,026
 
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
398,013
 
shares during the quarter
 
ended March 31, 2024
 
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 quarters ended March 31, 2024
and 2023:
Quarter ended
Quarter ended
March 31, 2024
March 31, 2023
Number of
Weighted-
Number of
Weighted-
shares of
Average
shares of
Average
restricted
Grant Date
restricted
Grant Date
stock
 
Fair Value
stock
 
Fair Value
Unvested shares outstanding at beginning of year
889,642
$
12.30
938,491
$
9.14
Granted
(1)
398,013
17.35
495,891
11.99
Forfeited
(1,905)
12.14
(25,415)
9.98
Vested
(252,504)
12.26
(481,536)
5.93
Unvested shares outstanding at end of period
1,033,246
$
14.26
927,431
$
12.32
(1)
For the quarter ended March 31,2024, includes
2,280
 
shares of restricted stock awarded to independent directors and
395,733
 
shares of restricted stock awarded to employees, of which
84,122
 
shares were granted to retirement-eligible employees and thus
 
charged to earnings as of the grant date. Includes
 
for the quarter ended March 31,2023,
3,502
 
shares of restricted
stock awarded to independent directors and
492,389
 
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 quarters
 
ended March 31,
 
2024 and 2023,
 
the Corporation recognized
 
$
2.4
 
million and $
1.6
 
million, respectively,
 
of stock-
based compensation
 
expense related
 
to restricted
 
stock awards.
 
As of
 
March 31,
 
2024,
 
there was
 
$
8.2
 
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
2.0
 
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.
 
Performance units granted during the quarters ended March 31, 2024 and 2023 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.
The following
 
table summarizes
 
the performance
 
units activity under
 
the Omnibus
 
Plan during
 
the quarters
 
ended March
 
31, 2024
and 2023:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Quarter ended
Quarter ended
March 31, 2024
March 31, 2023
Number
 
Weighted -
Number
 
Weighted -
of
Average
of
Average
Performance
Grant Date
Performance
Grant Date
Units
Fair Value
Units
Fair Value
Performance units at beginning of year
534,261
12.25
791,923
7.36
Additions
(1)
165,487
18.39
216,876
12.24
Vested
(2)
(150,716)
11.26
(474,538)
4.08
Performance units at end of period
549,032
14.37
534,261
12.25
(1)
Units granted during the quarters ended March 31, 2024 and 2023
 
are based on the achievement of the Relative TSR and TBVPS
 
performance goals during a three-year performance cycle
beginning January 1, 2024 and January 1, 2023, respectively,
 
and ending on December 31, 2026 and December 31, 2025,
 
respectively.
(2)
Units vested during the quarters ended March 31, 2024 and
 
2023 are related to performance units granted in 2021 and 2020, respectively,
 
that met the pre-established target and were
settled with shares of common stock reissued from treasury shares.
The fair value of the performance units awarded during the quarters ended March 31, 2024 and 2023, 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 March 31, 2024, 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, 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 the quarters
 
ended March 31, 2024 and 2023:
Quarter Ended March 31,
2024
2023
Risk-free interest rate
(1)
4.41
%
3.98
%
Correlation coefficient
73.80
77.16
Expected dividend yield
(2)
-
-
Expected volatility
(3)
34.65
41.37
Expected life (in years)
2.78
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 for a period equal to the simulation
 
term.
(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
 
each
 
of
 
the
 
quarters
 
ended
 
March
 
31,
 
2024
 
and
 
2023,
 
the
 
Corporation
 
recognized
 
$
0.5
 
million
 
of
 
stock-based
 
compensation
expense related to performance units.
 
As of March 31, 2024, there was $
5.6
 
million of total unrecognized compensation cost
 
related to
unvested performance units that the Corporation expects to recognize
 
over a weighted average period of
2.4
 
years.
Shares withheld
During the
 
first quarter
 
of 2024,
 
the Corporation
 
withheld
136,038
 
shares (first
 
quarter of
 
2023 –
287,835
 
shares) of
 
the restricted
stock and
 
performance
 
units that
 
vested during
 
such period
 
to cover
 
the participants’
 
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.