EMPLOYEE BENEFIT PLANS

9 Months Ended

Sep. 30, 2011

EMPLOYEE BENEFIT PLANS [Abstract]

EMPLOYEE BENEFIT PLANS

NOTE 9 – EMPLOYEE BENEFIT PLANS

Stock Option Plans

Stock-based compensation expense of $428 and $189 was recognized for the nine months ended September 30, 2011 and 2010, respectively. Unrecognized compensation expense related to unvested stock options was approximately $2,313 at September 30, 2011, and is expected to be recognized over a period of 3.5 years.  

During the nine months ended September 30, 2011, the Bancorp (as successor to the Bank) granted to employees options to purchase 200,268 shares of common stock at an weighted average exercise price of $12.12 per share. The stock options vest over the next five anniversaries from the date of grant. The estimated fair value of the stock options granted was calculated using the following weighted average assumptions of a Black-Scholes option pricing: risk-free interest rate was 2.05%; an expected dividend yield 0%; an expected volatility was 20% and an expected life of seven years. The weighted average fair value of the options granted was estimated to be $1.27 per share.

Stock option activity under the Bancorp's stock option plans at September 30, 2011 is as follows:

	Number of shares			Weighted average exercise price		Weighted average remaining contractual term (in years)		Aggregate intrinsic value
Outstanding, January 1, 2011		758,244		$	10.38
Issued		200,268			12.12
Forfeited		(6,367	)		20.36
Outstanding,  September 30, 2011		952,145		$	10.97		5.80	$	2,548
Options exercisable at September 30, 2011		6,592		$	31.75	4.24			-

The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value (the difference between the Bancorp's latest sale price of $13.20 and the exercise price) multiplied by the number of in-the-money options.

Restricted Stock Units

The Bancorp (as successor to the Bank) granted restricted stock units to purchase 106,876 shares of common stock on February 17, 2011. These awards vest in three equal annual installments on the first, second and third anniversaries of the date of grant. The fair value of the restricted stock units granted on February 17, 2011 was $12.00 per share. Unrecognized compensation expense related to unvested restricted stock units was approximately $338 at September 30, 2011 and is expected to be recognized over a period of 2.87 years.  Stock-based compensation expense of $87 was recognized for the nine months ended September 30, 2011. There were no grants of restricted stock units in the first nine months of 2010.