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SHARE-BASED COMPENSATION
 12 Months Ended
Dec. 31, 2021
Share-based Payment Arrangement [Abstract]  
SHARE-BASED COMPENSATION SHARE-BASED COMPENSATION
The Company awards its employees and directors various forms of share-based incentives under certain plans approved by its shareholders. Awards granted under the plans may be in the form of qualified or nonqualified stock options, restricted stock, stock appreciation rights (“SARs”), long-term incentive compensation units consisting of cash and common stock, or any combination thereof within the limitations set forth in the plans. The plans provide that the aggregate number of shares of the Company’s common stock which may be subject to award may not exceed 2,824,364 subject to adjustment in certain circumstances to prevent dilution. At December 31, 2021, there were 2,824,364 shares available to be issued under the plans.

All stock options have an exercise price that is equal to the closing fair market value of the Company’s stock on the date the options were granted. Options granted under the plans generally vest over a five-year period and have a 10-year maximum term. Most options granted since 2005 contain performance-based vesting conditions.

The Company did not grant any options during 2021, 2020 or 2019. As of December 31, 2021, there was no unrecognized compensation cost related to nonvested share-based compensation arrangements granted related to performance or non-performance-based options.  During 2019, the Company assumed 576,588 fully vested options in the Fidelity acquisition.

As of December 31, 2021, the Company has 225,869 outstanding restricted shares granted under the plans as compensation to certain employees and directors. These shares carry dividend and voting rights. Sales of these shares are restricted prior to the date of vesting, which is one to five years from the date of the grant. Shares issued under the plans are recorded at their fair market value on the date of their grant. The compensation expense is recognized on a straight-line basis over the related vesting period. In 2021, 2020 and 2019, compensation expense related to these grants was approximately $5.3 million, $3.3 million, and $3.4 million, respectively. The total income tax (deficiency) benefit related to these grants was approximately $338,000, $(161,000) and $113,000 in 2021, 2020 and 2019, respectively. Approximately $1.1 million of the compensation expense recorded for the year ending December 31, 2021 for restricted stock awards was related to performance-based restricted stock
that was not yet granted as of December 31, 2021, and was therefore recorded in other liabilities rather than in shareholders' equity on the Company's consolidated balance sheet as of December 31, 2021.

It is the Company’s policy to issue new shares for stock option exercises and restricted stock rather than issue treasury shares. The Company recognizes share-based compensation expense on a straight-line basis over the options’ related vesting term. The Company did not record any share-based compensation expense related to stock options during 2021, 2020 and 2019. The total income tax benefit related to stock options was approximately $631,000, $93,000 and $0 in 2021, 2020 and 2019, respectively.

A summary of the activity of non-performance-based options as of and for the years ended December 31, 2021, and 2020 is presented below.
20212020
SharesWeighted Average Exercise PriceWeighted Average Contractual Term
Aggregate Intrinsic Value
$ (000)
SharesWeighted Average Exercise PriceWeighted Average Contractual TermAggregate Intrinsic Value
$ (000)
Under option, beginning of year279,695 $28.13 387,193 $26.51 
Exercised(160,960)27.35 $3,406 (107,498)22.26 $1,128 
Forfeited(1,600)22.34 — — 
Under option, end of year117,135 $28.79 0.66$2,389 279,695 $28.13 1.26$2,780 
Exercisable at end of year117,135 $28.79 0.66$2,389 279,695 $28.13 1.26$2,780 

A summary of the status of the Company’s restricted stock awards as of and for the years ended December 31, 2021, and 2020 is presented below.
20212020
SharesWeighted Average Grant Date Fair ValueSharesWeighted Average Grant Date Fair Value
Nonvested shares at beginning of year258,753 $33.21 182,401 $44.04 
Granted99,308 47.35 164,476 25.17 
Vested(129,497)35.85 (75,874)40.94 
Forfeited(2,695)37.32 (12,250)38.99 
Nonvested shares at end of year225,869 38.06 258,753 33.21 

The balance of unearned compensation related to restricted stock grants as of December 31, 2021, 2020 and 2019 was approximately $3.8 million, $3.9 million, and $3.7 million, respectively. At December 31, 2021, the cost is expected to be recognized over a weighted-average period of 1.7 years.

During 2021 and 2020, the Company issued 24,294 and 38,401 performance stock units ("PSUs") with a weighted average grant date fair value of $46.32 and $25.55, respectively, subject to a performance condition tied to tangible book value growth over a three-year period. The Company also granted 24,286 and 38,391 PSUs in 2021 and 2020, respectively, subject to a three-year performance metric of return on tangible common equity relative to a market index with a potential modifier subject to a total shareholder return ("TSR") performance metric with a weighted average grant date fair value of $48.75 and $24.83, respectively. The fair value of the PSUs subject to TSR at the grant date was determined using a Monte Carlo simulation method. The Company communicates threshold, target and maximum performance PSUs and performance targets to the applicable employees at the beginning of the performance periods. Dividends are not paid in respect of the awards during the performance period, although dividend equivalents do accrue over the life of the award and will vest, if at all, at the same time as the PSUs to which they relate. The number of PSUs that ultimately vest at the end of the three-year performance period, if any, will be based on the Company's performance relative to the applicable performance metrics. In 2021, the Company recognized compensation cost related to these grants of approximately $2.6 million. The balance of unearned compensation related to PSU grants as of December 31, 2021 was approximately $3.2 million.
A summary of the Company's nonvested PSUs for the years ended December 31, 2021, and 2020 is presented below:
20212020
SharesWeighted Average Grant Date Fair ValueSharesWeighted Average Grant Date Fair Value
Nonvested units at beginning of year76,792 $25.19 — $— 
Granted48,580 47.53 76,792 25.19 
Forfeited(4,102)35.80 — — 
Nonvested units at end of year121,270 32.71 76,792 25.19