Share-Based Compensation

6 Months Ended

Jun. 30, 2019

Share-based Payment Arrangement [Abstract]

The Corporation maintains share-based compensation plans under which it periodically grants share-based awards for a fixed number of shares to certain officers of the Corporation. The fair value of share-based awards is recognized as compensation expense over the requisite service or performance period. During the three months ended June 30, 2019 and 2018, share-based compensation expense related to share-based awards totaled $2.8 million and $2.4 million, respectively. During the six months ended June 30, 2019 and 2018, share-based compensation expense related to share-based awards totaled $5.1 million and $4.1 million, respectively. The excess tax benefit realized from share-based compensation transactions during the three months ended June 30, 2019 and 2018 was an expense of $16 thousand and a benefit of $399 thousand, respectively, and during the six months ended June 30, 2019 and 2018 was a benefit of $306 thousand and $1.8 million, respectively.

During the six months ended June 30, 2019, the Corporation granted 379,260 restricted stock units to certain officers of the Corporation.

On May 7, 2019, the shareholders of the Corporation approved the Stock Incentive Plan of 2019, which provides for 2,400,000 shares of the Corporation's common stock to be made available for future equity-based awards and canceled the amount of shares available for future grant under prior share-based compensation plans. At June 30, 2019, there were 2,388,937 shares of common stock available for future grants under the Stock Incentive Plan of 2019.

Stock Options

The Corporation issues stock options to certain officers from time to time. The exercise price on stock options equals the current market price of the Corporation's common stock on the date of grant and stock options expire ten years from the date of grant. Stock options granted after 2012 vest ratably over a five-year period. Stock options granted prior to 2016 were fully vested upon the merger with Talmer. Stock options assumed by the Corporation in the merger with Talmer were fully vested prior to assumption.

A summary of activity for the Corporation's stock options as of and for the six months ended June 30, 2019 is presented below:



	Non-Vested Stock Options Outstanding						Stock Options Outstanding
	Number of Options		Weighted- Average Exercise Price Per Share		Weighted- Average Grant Date Fair Value Per Share		Number of Options		Weighted- Average Exercise Price Per Share
Outstanding at December 31, 2018	221,658		$	38.37	$	7.16	777,443		$	31.42
Exercised	—		—		—		(97,284	)	29.69
Vested	(65,104	)	37.24		6.98		—		—
Forfeited/expired	(28,566	)	36.40		6.82		(31,874	)	36.40
Outstanding at June 30, 2019	127,988		$	39.38	$	7.33	648,285		$	31.43
Exercisable/vested at June 30, 2019							520,297		$	29.48

The weighted-average remaining contractual terms were 5.2 years for all outstanding stock options and 4.8 years for exercisable stock options at June 30, 2019. The intrinsic value of all outstanding in-the-money stock options and exercisable in-the-money stock options was $7.5 million and $6.8 million, respectively, at June 30, 2019. The aggregate intrinsic values of outstanding and exercisable options at June 30, 2019 were calculated based on the closing market price of the Corporation’s common stock on June 30, 2019 of $41.11 per share less the exercise price. Options with intrinsic values less than zero, or "out-of-the-money" options, are not included in the aggregate intrinsic value reported. The total intrinsic value of stock options as of June 30, 2018 and December 31, 2018 was $19.8 million and $26.6 million, respectively.

Total cash received from options exercises during the six months ended June 30, 2019 and 2018 was $338 thousand and $2.2 million, respectively.

At June 30, 2019, unrecognized compensation expense related to stock options totaled $901 thousand and is expected to be recognized over a remaining weighted average period of 2.1 years.

Restricted Stock Units

The Corporation grants Performance-Based Restricted Stock Units ("PRSUs") and Time-Based Restricted Stock Units ("TRSUs") (collectively referred to as "RSUs") to certain officers from time to time. The PRSUs vest based on the Corporation achieving certain performance target levels and the grantee completing the requisite service period. The PRSUs are eligible to vest from 0.5x to 1.5x the number of units originally granted depending on which, if any, of the performance target levels are met. However, if the minimum performance target levels are not achieved, no shares will become vested or be issued for that respective year's PRSUs. The TRSUs vest upon satisfaction of a service condition. Upon achievement of the performance target level and/or satisfaction of a service condition, as applicable, the RSUs are converted into shares of the Corporation's common stock on a one-to-one basis. Compensation expense related to RSUs is recognized over the expected requisite performance or service period, as applicable.

A summary of the activity for RSUs as of and for the six months ended June 30, 2019 is presented below:



	Number of Units		Weighted-average grant date fair value per unit
Outstanding at December 31, 2018	576,490		$	49.35
Granted	379,260		44.95
Converted into shares of common stock	(123,686	)	38.83
Forfeited/expired	(21,406	)	50.03
Outstanding at June 30, 2019	810,658		$	48.88

At June 30, 2019, unrecognized compensation expense related to RSUs totaled $27.6 million and is expected to be recognized over a remaining weighted average period of 3.5 years.

Restricted Stock Awards

The Corporation assumed restricted stock awards in the merger with Talmer that vested upon completion of service requirements. The fair value of these awards is equal to the market price of the Corporation's common stock at the date the awards were assumed with the portion of the fair value related to post-combination service. The Corporation recognizes stock-based compensation expense over the vesting period, using the straight-lined method, based upon the number of shares of restricted stock ultimately expected to vest.

The following table provides information regarding restricted stock awards. All restricted stock awards fully vested during the six months ended June 30, 2019.



Nonvested restricted stock awards	Number of Awards		Weighted-average acquisition-date fair value
Nonvested at January 1, 2019	40,852		$	46.23
Vested	(40,852	)	46.23
Nonvested at June 30, 2019	—		$	—