Equity-Based Compensation

6 Months Ended

Jun. 30, 2014

Share-based Compensation [Abstract]

Equity-Based Compensation

EQUITY-BASED COMPENSATION

As of June 30, 2014, we had three stock incentive plans under which performance share grants, restricted stock unit (RSU) grants and stock options were outstanding, with approximately 1,082,161 shares authorized for future use under the 2014 Long-Term Incentive Plan.

On May 8, 2014, our board approved changes to our director compensation program. This amendment states that upon a director's separation from the company, all deferred awards will be settled in company stock and no longer settled in cash. This resulted in a reclassification of the related $4.3 million liability to shareholder equity.

As of June 30, 2014, there were 111,306 shares that will be distributed to directors in the future.

The following table details our equity-based compensation expense and director deferred compensation expense for the quarters and six months ended June 30:

	Quarter Ended   June 30,					Six Months Ended   June 30,
(Dollars in thousands)	2014		2013			2014			2013
Employee equity-based compensation expense:
Performance shares	$	961	$	891		$	1,695		$	1,753
Restricted stock units	163		138			337			348
Total employee equity-based compensation expense	$	1,124	$	1,029		$	2,032		$	2,101
Total tax benefit recognized	$	81	$	64		$	155		$	140
Director deferred compensation (income) expense	$	427	$	(940	)	$	(14	)	$	350

PERFORMANCE SHARES

The following table presents the key inputs used in the Monte Carlo simulation method to calculate the fair value of the performance share awards in 2014 and 2013, and the resulting fair values:

	2014			2013
Shares granted	87,441			83,111
Stock price as of valuation date	$	39.76		$	45.31
Risk-free rate	0.72		%	0.40		%
Fair value of a performance share	$	45.57		$	62.78

The following table summarizes outstanding performance share awards as of June 30, 2014, and changes during the six months ended June 30, 2014:

(Dollars in thousands, except grant date fair value)	Shares	Weighted Avg. Grant Date Fair Value		Aggregate Intrinsic Value
Unvested shares outstanding at January 1	155,814	$	48.73
Granted	87,441	45.57
Forfeited	—
Unvested shares outstanding at June 30	243,255	47.60		$	10,071

As of June 30, 2014, there was $6.2 million of unrecognized compensation cost related to unvested performance share awards, which is expected to be recognized over a weighted average period of 1.5 years.

RESTRICTED STOCK UNITS

The following table summarizes outstanding RSU awards as of June 30, 2014, and changes during the six months ended June 30, 2014:

(Dollars in thousands, except grant date fair value)	Shares		Weighted Avg. Grant Date Fair Value		Aggregate Intrinsic Value
Unvested shares outstanding at January 1	37,461		$	38.69
Granted	13,349		39.66
Vested	(4,350	)	44.31
Forfeited	—		—
Unvested shares outstanding at June 30	46,460		38.44		$	1,923

The fair value of each RSU equaled our common share price on the date of grant. The total fair value of RSU awards vested during the six months ended June 30, 2014 was $0.2 million. As of June 30, 2014, there was $0.9 million of total unrecognized compensation cost related to unvested RSU awards, which is expected to be recognized over a weighted average period of 1.4 years.

STOCK OPTIONS

The following table summarizes outstanding stock options as of June 30, 2014, and changes during the six months ended June 30, 2014:

(Dollars in thousands, except exercise prices)	Shares		Weighted Avg. Exercise Price		Aggregate Intrinsic Value
Outstanding at January 1	12,859		$	30.92
Shares exercised	(493	)	30.92
Shares canceled or expired	—		—
Outstanding and exercisable at June 30	12,366		30.92		$	130

The following table summarizes outstanding stock options as of June 30, 2014:

	Options Outstanding and Exercisable
Exercise Price	Outstanding	Weighted Avg. Remaining Contractual Life
$30.9204	12,366	0.42 years