Share-based Compensation

3 Months Ended

Mar. 31, 2013

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Share-based Compensation

Share-based Compensation

The Company uses the fair value method of accounting for stock-based compensation. The fair value of stock options is estimated at the date of grant using the Black-Scholes option pricing model.

The following table is a summary of stock awards activity:

	2005 Plan							1999 Plan
		Restricted Stock			Stock Options			Stock Options
	Shares Available For Grant	Number of Shares	Weighted Average Grant Date Fair Value		Number Of Shares	Weighted Average Exercise Price		Number Of Shares	Weighted Average Exercise Price
January 1, 2012	613,434	46,000	$	17.032	17,800	$	10.526	15,800	$	16.018
Awards Granted	—	—	—		—	—		—	—
Vested	—	—	—		—	—		—	—
Forfeitures	—	—	—		—	—		—	—
Expired	—	—	—		—	—		—	—
March 31, 2012	613,434	46,000	$	17.032	17,800	$	10.526	15,800	$	16.018
January 1, 2013	240,388	373,646	$	4.510	17,200	$	10.714	10,800	$	17.590
Awards Granted	—	—	—		—	—		—	—
Vested	—	—	—		—	—		—	—
Forfeitures	—	—	—		—	—		—	—
Expired	—	—	—		—	—		—	—
March 31, 2013	240,388	373,646	$	4.510	17,200	$	10.714	10,800	$	17.590
Shares exercisable at March 31, 2013		—	—		11,800	$	13.055	10,800	$	17.590

The Company estimates a forfeiture rate of 9.45% (1.89% annual rate) for stock options issued to employees and a forfeiture rate of 5.45% (1.09% annual rate) for stock options issued to directors in determining net compensation costs. At March 31, 2013, there were $1 thousand in unrecognized compensation costs related to stock option awards.

The Company issues restricted stock awards to certain executives and other key employees. The awards vest over periods of one to seven years and are forfeited in their entirety if the officer leaves the Company before the end of the vesting term. Dividends are paid quarterly to restricted stock grantees. In April2012 the Company granted 298,746 shares of restricted stock to certain officers and other employees. Also during April2012 the Company granted 81,900 shares of restricted stock to the directors of the Company who are not members of management. The April grants vest over a 5 year period and may be forfeited if the employee or director leaves before the completion of the vesting period. The 2012 stock grants do not contain any performance conditions. At March 31, 2013, there were $1.348 million in unrecognized compensation costs for all restricted stock grants. The unrecognized costs at March 31, 2013, are expected to be recognized over a weighted-average period of 4.03 years. The Company estimates that 4.00% (0.80% annual rate) of the employee shares and 2.00% (0.40% annual rate) of the director shares will be forfeited in determining net compensation expenses recognized. The restricted stock agreements have a change-in-control provision which would trigger immediate vesting of the shares and recognition of the remaining unrecognized compensation costs if the Company were to be acquired. This provision would be triggered if the proposed acquisition of the Company by Renasant Corporation is completed.

In July 2010 the Board of Directors approved the reservation of 1,000,000 shares of authorized, unissued shares for issuance in lieu of cash for directors’ fees earned for 2010 and beyond. All shares are issued at market value and provide a convenient way for directors to receive shares of the Company based on the amount of directors’ fees that would otherwise be paid. Directors individually elect a percentage of their compensation, not less than 50%, to be received in common stock with the balance of the fees being paid in cash each quarter. For the first quarter of 2013, 3,118 shares were issued to directors in lieu of fees.