Stock-Based Compensation

9 Months Ended

Sep. 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 nine months ended September 30, 2023:




	Restricted Stock Units Outstanding	Weighted Average Grant Date Fair Value
Balance at beginning of period (unvested)	365,155	$	39.02
Granted	166,591	35.90
Vested	(199,776)	38.05
Forfeited	(2,571)	41.03
Balance at end of period (unvested)	329,399	$	38.03

The total fair value of restricted stock units vested was $1,208 and $7,601 for the three and nine months ended September 30, 2023, respectively, and $1,474 and $7,320 for the three and nine months ended September 30, 2022, respectively.

The compensation cost related to these grants and vesting of restricted stock units was $1,965 and $5,859 for the three and nine months ended September 30, 2023, respectively, and $1,701 and $5,753 for the three and nine months ended September 30, 2022, respectively. This includes amounts paid related to grants and compensation for directors elected to be settled in stock amounting to $179 and $626 during the three and nine months ended September 30, 2023, respectively, and $171 and $485 for the three and nine months ended September 30, 2022, respectively.

As of September 30, 2023, there was $9,082 of total unrecognized compensation cost related to unvested restricted stock units which is expected to be recognized over a weighted-average period of 2.07 years. Additionally, as of September 30, 2023, there were 1,506,871 shares available for issuance under the Company's stock compensation plans. As of September 30, 2023 and December 31, 2022, there was $316 and $292, respectively, 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, 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 nine months ended September 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	(4,752)	43.58
Balance at end of period (unvested)	189,536	$	40.91
(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 September 30, 2023:


Grant Year	Grant Price		Performance Period	PSUs Outstanding
2021 (1)	$	43.20	2021 to 2023	50,638
2022 (2)	$	44.44	2022 to 2024	55,660
2023 (2)	$	37.17	2023 to 2025	83,238
(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 $819 and $2,458 for the three and nine months ended September 30, 2023, respectively, and $832 and $2,400 for the three and nine months ended September 30, 2022, respectively. As of September 30, 2023, maximum unrecognized compensation cost at 200% payout related to the unvested PSUs was $12,696, and the weighted average remaining performance period over which the cost could be recognized was 2.01 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 12,306 and 11,798 shares of common stock issued under the ESPP with proceeds from employee payroll withholdings of $381 and $499, during the three months ended September 30, 2023 and 2022, respectively. There were 20,520 and 26,950 shares of common stock issued under the ESPP with proceeds from employee payroll withholdings of $686 and $1,087, during the nine months ended September 30, 2023 and 2022, respectively. As of September 30, 2023, there were 2,294,226 shares available for issuance under the ESPP.