24. Stock-Based Compensation

The Company has various types of stock-based compensation plans. These plans are administered by the Compensation and Human Resources Committee of the Board of Directors, which selects persons eligible to receive awards and approves the number of shares and/or options subject to each award, the terms, conditions, and other provisions of the awards.

Restricted Stock

The Company issues restricted stock under the 2006 Plan for certain officers and directors. The 2006 Plan authorized the issuance of restricted stock. The plan allows for the issuance of restricted stock awards that may not be sold or otherwise transferred until certain restrictions have lapsed. The fair value of the restricted stock shares awarded under the plan is recorded as unearned share-based compensation, a contra-equity account. The unearned compensation related to these awards is amortized over the vesting period (generally 5 years). The total share-based compensation expense related to the awards is determined based upon an independent valuation of the restricted stock as of the grant date applied to the total number of shares granted and is amortized over the vesting period. There were 25,667 shares of restricted stock vested as of December 31, 2013. There was no unearned share-based compensation associated with these awards as of December 31, 2013. There were no restricted shares issued during 2013 and 2012, respectively.

There was no compensation expense that was included in salaries and benefits expense in the accompanying consolidated statements of income for the years ended December 31, 2013 and 2012, respectively. There was $0.3 million in compensation expense that was included in salaries and benefits expense in the accompanying consolidated statements of income for the year ended December 31, 2011.

Stock Options

The Company issues stock options to directors, officers, and other key employees. The option exercise price cannot be less than the fair value of the underlying common stock as of the date of the option grant and the maximum option term cannot exceed ten years. The stock options granted were issued with vesting periods ranging from three to four years. At December 31, 2013, there were 0.3 million shares available for future issuance of option or restricted stock awards under approved compensation plans.

For the years ended December 31, 2013, 2012 and 2011, total stock option compensation expense that is included in salaries and employee benefits expense was $0.7 million, $0.5 million and $0.3 million, respectively. The related income tax benefit in the accompanying consolidated statements of income was $0.2 million, $0.2 million and $0.1 million, respectively.

The Company uses the Black-Scholes option pricing model to estimate the fair value of the stock options awards. The following weighted-average assumptions were used for option awards granted during the years ended December 31 of the periods indicated:


	2013			2012			2011
Expected dividend yield		0.00	%		0.00	%		0.00	%
Weighted-average expected volatility		36.68	%		35.33	%		31.50	%
Weighted-average risk-free interest rate		1.73	%		1.25	%		2.87	%
Expected option term (in years)		6.0			6.3			6.0
Contractual term (in years)		10			10			10
Weighted-average grant date fair value	$	5.22		$	5.49		$	4.33

The assumptions above were based on multiple factors, primarily the historical stock option patterns of a group of publicly traded peer banks based in the southeastern United States.

At December 31, 2013, there was $1.8 million in unrecognized compensation cost related to stock options which is expected to be recognized over a weighted-average period of 2 years.

The following table represents the activity related to stock options during the periods indicated.


	Number of Shares			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (Years)
Options outstanding, December 31, 2010		215,000		$	10.04
Granted		229,657			12.25
Exercised		—			—
Forfeited or expired		(999	)		12.23

Options outstanding, December 31, 2011		443,658			11.11
Granted		378,692			14.69
Exercised		—			—
Forfeited or expired		(13,333	)		14.43

Options outstanding, December 31, 2012		809,017			11.81
Granted		139,650			16.16
Exercised		(76,966	)		10.39
Forfeited or expired		(16,600	)		15.16

Options outstanding, December 31, 2013		855,101		$	13.48		7.0


Options exercisable, December 31, 2011		270,599		$	10.53
Options exercisable, December 31, 2012		289,444		$	10.60
Options exercisable, December 31, 2013		374,535		$	11.94		6.0

The following table presents weighted-average remaining life as of December 31, 2013 for options outstanding within the stated exercise prices:


	Options Outstanding						Options Exercisable
Exercise Price Range Per Share	Number of Shares		Weighted- Average Exercise Price		Weighted- Average Remaining Life (Years)		Number of Shares		Weighted- Average Exercise Price
$10.00-$12.70		368,181	$	11.35		5.0		292,074	$	11.11
$14.20-$14.88		351,870		14.68		8.0		82,461		14.88
$15.88-$23.68		135,050		16.17		9.0		—		—

Total Options		855,101	$	13.48		7.0		374,535	$	11.94

At December 31, 2013, the aggregate intrinsic value of shares underlying outstanding stock options and underlying exercisable stock options was $16.1 million and $7.6 million. Total intrinsic value of options exercised was $1.2 million for the year ended December 31, 2013. There were no options exercised during the years ended December 31, 2012 and 2011, respectively.