STOCK BASED COMPENSATION

6 Months Ended

Jun. 30, 2020

Share-based Payment Arrangement [Abstract]

The Company’s stock based compensation consists of restricted stock awards ("RSAs") and restricted stock units ("RSUs") granted under the Luther Burbank Corporation Omnibus Equity and Incentive Compensation Plan ("Omnibus Plan"). In connection with its initial public offering ("IPO") in December 2017, the Company granted RSAs and RSUs to employees and nonemployee directors which all vest ratably over three years. At the same time, the Company granted RSUs in exchange for unvested phantom stock awards held by employees and all vested and unvested phantom stock awards held by nonemployee directors on a per share basis. The RSUs were subjected to the same vesting schedule and deferral elections that existed for the original phantom stock awards. Awards granted subsequent to the IPO vest ratably over one year for nonemployee directors and ratably over three to four years for employees.

All RSAs and RSUs were granted at the fair value of the common stock at the time of the award. The RSAs and RSUs are considered fixed awards as the number of shares and fair value are known at the date of grant and the fair value at the grant date is amortized over the vesting and/or service period.

Non-cash stock compensation expense recognized for RSAs and RSUs for the three and six months ended June 30, 2020 totaled $882 thousand and $1.8 million, respectively, compared with $676 thousand and $1.5 million, respectively, for the three and six months ended June 30, 2019. The fair value of RSAs and RSUs that vested during the three and six months ended June 30, 2020 totaled $80 thousand and $2.5 million, respectively, compared to $5.7 million for the six months ended June 30, 2019. There were no RSAs or RSUs that vested during the three months ended June 30, 2019.

As of June 30, 2020 and December 31, 2019, there was $4.3 million and $3.5 million, respectively, of unrecognized compensation expense related to 561,430 and 582,940 unvested RSAs and RSUs, respectively, which amounts are expected to be expensed over a weighted average period of 1.85 years and 1.61 years, respectively. As of June 30, 2020 and December 31, 2019, 165,185 and 135,059 shares, respectively, of RSUs were vested and remain unsettled per the original deferral elections.

The following table summarizes share information about RSAs and RSUs:


	Six Months Ended June 30,
	2020				2019
	Number of Shares	Weighted Average Grant Date Fair Value		Number of Shares	Weighted Average Grant Date Fair Value
Beginning of the period balance	717,999	$	10.53	1,155,359	$	10.97
Shares granted	250,118	11.72		321,784	9.80
Shares settled	(211,210)	10.51		(179,325)	11.40
Shares forfeited	(30,292)	11.08		(50,037)	10.69
End of the period balance	726,615	$	10.92	1,247,781	$	10.62

Under its Omnibus Plan, the Company reserved 3,360,000 shares of common stock for new awards. At June 30, 2020 and December 31, 2019, there were 2,111,481 and 2,332,775 shares, respectively, of common stock reserved and available for grant through restricted stock or other awards under the Omnibus Plan. During the three and six months ended June 30, 2020, there were no shares and 1,468 shares, respectively, of forfeited RSU awards that were initially issued to replace unvested phantom stock awards under the Luther Burbank Corporation Phantom Stock Plan, compared to 14,041 forfeited shares for both the three and six months ended June 30, 2019. These awards were excluded from the shares reserved and available for grant under the Omnibus Plan.