NOTE 14 – STOCK COMPENSATION PLANS

Share-based Compensation Expense

For the three months ended March 31, 2014 and 2013, share-based compensation expense was $923 thousand and $331 thousand, respectively, and the related tax benefits were none and $2 thousand, respectively.

On July 16, 2013, the Company’s stockholders approved the Company’s 2013 Omnibus Stock Incentive Plan (the 2013 Omnibus Plan). Upon the approval of the 2013 Omnibus Plan, no new awards may be granted under the Company’s 2011 Omnibus Incentive Plan or any prior equity incentive plans. The 2013 Omnibus Plan provides that the aggregate number of shares of Company common stock that may be subject to awards under the 2013 Omnibus Plan will be 20 percent of the then outstanding shares of Company common stock (the Share Limit), provided that in no event will the Share Limit be less than the greater of 2,384,711 shares of Company common stock and the aggregate number of shares of Company common stock with respect to which awards have been properly granted under the 2013 Omnibus Plan up to that point in time. As of March 31, 2014, the Share Limit and available shares for future awards under the 2013 Omnibus Plan were 2,173,750 shares.

Unrecognized Share-based Compensation Expense

The following table presents unrecognized share-based compensation expense as of March 31, 2014:


	Unrecognized Expense		Average Expected Recognition Period
	($ in thousands)
Stock option awards	$	1,345		4.14 years
Restricted stock awards		10,395		3.65 years

Total	$	11,740		3.71 years

Stock Options

The Company has issued stock options to certain employees, officers and directors. Stock options are issued at the current market price on the date of grant, and generally have provided for a three-year to five-year vesting period and contractual terms of 7 to 10 years.

The following table represents stock option activity as of and for the three months ended March 31, 2014:


	Number of Shares			Weighted- Average Exercise Price per Share		Weighted- Average Remaining Contractual Term		Aggregate Intrinsic Value *(In thousands)*
Outstanding at beginning of period		734,721		$	12.73		7.5 years	$	741
Granted		—		$	—		0 years	$	—
Exercised		(66,667	)	$	11.36		0 years	$	—
Forfeited		—		$	—		0 years	$	—

Outstanding at end of period		668,054		$	12.86		7.3 years	$	188

Exercisable at end of period		335,000		$	11.71		7.6 years	$	188

The following table represents changes in unvested stock options and related information as of and for the three months ended March 31, 2014:


	Number of Shares		Weighted- Average Exercise Price per Share
Non-vested outstanding at beginning of period		419,569	$	13.16
Granted		—	$	—
Vested		—	$	—
Forfeited		—	$	—

Non-vested outstanding at end of period		419,569	$	13.16

Restricted Stock Awards

Additionally, the Company also has granted restricted stock awards to certain employees, officers and directors. The restricted stock awards are valued at the closing price of the Company’s stock on the date of award. The restricted stock awards fully vest after one to five years of continued employment from the date of grant. The Company recognizes an income tax deduction in an amount equal to the taxable income reported by the holders of the restricted stock, generally when vested.

The following table represents restricted stock awards activity as of and for the three months ended March 31, 2014:


	Number of Shares			Weighted- Average Exercise Price per Share
Non-vested shares outstanding at beginning of period		893,886		$	13.78
Granted		95,719		$	13.07
Vested		(22,879	)	$	11.19
Forfeited		(83,184	)	$	13.06

Non-vested shares outstanding at end of period		883,542		$	13.83

Stock Appreciation Right

On August 21, 2012, the Company granted to its chief executive officer a ten-year stock appreciation right (SAR) with respect to 500,000 shares (Initial SAR) of the Company’s common stock with a base price of $12.12 per share. One third of the Initial SAR vested on the grant date, one third vested on the first anniversary of the grant date and one-third will vest on the second anniversary of the grant date such that the SAR will be fully vested on the second anniversary of the grant date. On June 21, 2013, a SAR with respect to an additional 150,933 shares (Additional SAR I) with a base price of $13.00 per share was granted to the Company’s chief executive officer pursuant to the anti-dilution provisions under his SAR agreement with the Company due to the Company’s issuance on that date of shares of common stock in an underwritten public offering. On July 1, 2013, July 2, 2013 and December 10, 2013, SARs with respect to an additional 88,366, 15,275 and 70,877 shares (Additional SARs II, III and IV, respectively, and together with Additional SAR I and the Initial SAR, the SARs) with base prices of $13.49, $13.49 and $12.65 per share, respectively, were granted to the Company’s chief executive officer pursuant to the anti-dilution provisions of his SAR agreement with the Company due to the Company’s issuances on those dates of shares of common stock in connection with the completion of the PBOC acquisition, the exercise of the over-allotment option granted to the underwriters of the Company’s public common stock offering initially completed on June 21, 2013 and the private placement in accordance with a Securities Purchase Agreement executed on December 3, 2013.

The Additional SARs have the same terms and conditions, including vesting, as the Initial SAR. Compensation expense for the SAR is recognized over the vesting period based on the fair value as calculated using Black Scholes as of the grant date and adjusted each quarter. The SARs originally were to be settled in cash. On December 13, 2013, the Company converted all outstanding SARs to stock options with the same terms absent an ability to settle in cash.