Stock-Based Compensation

6 Months Ended

Jun. 30, 2023

Share-Based Payment Arrangement [Abstract]

Stock-Based Compensation:

Restricted Stock Units

The Company grants RSUs under compensation arrangements for the benefit of employees, executive officers, and directors. RSU grants are subject to time-based vesting. Compensation cost associated with time-based vesting RSUs is recognized on a straight line basis based on the grant date fair value of the awards. The total number of restricted stock units granted represents the maximum number of restricted stock units eligible to vest based upon the service conditions set forth in the grant agreements.

The following table summarizes changes in restricted stock units for the six months ended June 30, 2023:




	Restricted Stock Units Outstanding	Weighted Average Grant Date Fair Value
Balance at beginning of period (unvested)	365,155	$	39.02
Granted	163,552	36.04
Vested	(163,129)	39.19
Forfeited	(2,188)	41.19
Balance at end of period (unvested)	363,390	$	37.59

The total fair value of restricted stock units vested and released was $1,802 and $6,393 for the three and six months ended June 30, 2023, respectively, and $2,449 and $5,846 for the three and six months ended June 30, 2022, respectively.

The compensation cost related to these grants and vesting of restricted stock units was $2,188 and $3,894 for the three and six months ended June 30, 2023, respectively, and $2,196 and $4,052 for the three and six months ended June 30, 2022, respectively. This includes amounts paid related to director grants and compensation elected to be settled in stock amounting to $272 and $447 during the three and six months ended June 30, 2023, respectively, and $148 and $314 for the three and six months ended June 30, 2022, respectively.

As of June 30, 2023, there was $11,036 of total unrecognized compensation cost related to unvested restricted stock units which is expected to be recognized over a weighted-average period of 2.26 years. Additionally, as of June 30, 2023, there were 1,534,973 shares available for issuance under the Company's stock compensation plans. As of both June 30, 2023 and December 31, 2022, there was $292 accrued in other liabilities related to dividend equivalent units declared to be paid upon vesting and distribution of the underlying restricted stock units.

Performance-Based Restricted Stock Units

The Company awards PSUs to executives and other officers and employees. Under the terms of the awards, the number of units that will vest and convert to shares of common stock will be based on the Company's performance relative to a predefined peer group over a fixed three-year performance period. The number of shares issued upon vesting will range from 0% to 200% of the PSUs granted. The Company's performance relative to a predefined peer group will be measured based on non-GAAP core return on average tangible common equity ratio, which is adjusted for unusual gains/losses, merger expenses, and other items as approved by the Compensation Committee of the Company's board of directors. Compensation expense for PSUs is estimated each period based on the fair value of the Company's stock at the grant date and the most probable outcome of the performance condition, adjusted for the passage of time within the performance period of the awards.

The following table summarizes information about the changes in PSUs as of and for the six months ended June 30, 2023:






	Performance Stock Units Outstanding	Weighted Average Grant Date Fair Value
Balance at beginning of period (unvested)	161,667	$	41.73
Granted	86,010	37.17
Performance adjustment (1)	51,444	36.93
Vested	(104,833)	36.93
Forfeited or expired	(1,153)	44.25
Balance at end of period (unvested)	193,135	$	40.96
(1) PSUs are presented as outstanding, granted and forfeited in the table above assuming targets are met and the awards pay out at 100%. PSU awards are settled with payouts ranging from 0% and 200% of the target award value based on the Company's performance relative to a predefined peer group over a fixed three-year performance period. The performance adjustment represents the difference in shares ultimately awarded due to performance attainment above or below target.

The following table summarizes data related to the Company's outstanding PSUs as of June 30, 2023:


Grant Year	Grant Price		Performance Period	PSUs Outstanding
2021 (1)	$	43.20	2021 to 2023	52,491
2022 (2)	$	44.44	2022 to 2024	57,190
2023 (2)	$	37.17	2023 to 2025	83,454
(1)Vesting factor will be either at 0%, 25%, 100%, or 200% of PSUs outstanding based on the Company's performance relative to a predefined peer group over a fixed three-year performance period. (2)Vesting factor will be interpolated between 0% and 200% of PSUs outstanding based on the Company's performance relative to a predefined peer group over a fixed three-year performance period.

The Company recorded compensation cost of $1,060 and $1,639 for the for the three and six months ended June 30, 2023, respectively, and $842 and $1,568 for the three and six months ended June 30, 2022, respectively. As of June 30, 2023, maximum unrecognized compensation cost at 200% payout related to the unvested PSUs was $13,323, and the weighted average remaining performance period over which the cost could be recognized was 2.3 years.

Employee Stock Purchase Plan:

The Company maintains an employee stock purchase plan under which employees, through payroll deductions, are able to purchase shares of Company common stock. The employee purchase price is 95% of the lower of the market price on the first or last day of the offering period. The maximum number of shares issuable during any offering period is 200,000 shares and a participant may not purchase more than 725 shares during any offering period (and, in any event, no more than $25 worth of common stock in any calendar year). There were no shares issued under the ESPP during the three months ended June 30, 2023 or 2022. There were 8,214 and 15,152 shares of common stock issued under the ESPP with proceeds from employee payroll withholdings of $305 and $588, during the six months ended June 30, 2023 and 2022, respectively. As of June 30, 2023, there were 2,306,532 shares available for issuance under the ESPP.