SHARE-BASED COMPENSATION

12 Months Ended

Dec. 31, 2024

Share-Based Payment Arrangement [Abstract]

The Company awards its employees and directors various forms of share-based incentives under certain plans approved by its shareholders. Awards granted under the 2021 Omnibus Equity Compensation Plan may be in the form of an option, stock appreciation right, restricted share, restricted share unit, performance share, performance share unit, performance award or other stock-based award 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 2,766,302 subject to adjustment in certain circumstances to prevent dilution. At December 31, 2024, there were 2,175,577 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.

The Company did not grant any options during 2024, 2023 or 2022. As of December 31, 2024, there was no unrecognized compensation cost related to options.

As of December 31, 2024, the Company has 268,966 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 2024, 2023 and 2022, compensation expense related to these grants was approximately $5.7 million, $5.3 million, and $4.4 million, respectively. The total income tax benefit related to these grants was approximately $164,000, $770,000 and $293,000 in 2024, 2023 and 2022, respectively.

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 2024, 2023 and 2022. The total income tax benefit related to stock options was approximately $0, $41,000 and $339,000 in 2024, 2023 and 2022, respectively.

A summary of the activity of non-performance-based options as of and for the years ended December 31, 2024, and 2023 is presented below.


	2024						2023
	Shares	Weighted Average Exercise Price		Weighted Average Contractual Term	Aggregate Intrinsic Value $ (000)		Shares	Weighted Average Exercise Price		Weighted Average Contractual Term	Aggregate Intrinsic Value $ (000)
Under option, beginning of year	—	$	—				16,000	$	29.69


Exercised	—	—			$	—	(16,000)	29.69			$	258

Under option, end of year	—	$	—	0.00	$	—	—	$	—	0.00	$	—
Exercisable at end of year	—	$	—	0.00	$	—	—	$	—	0.00	$	—

A summary of the status of the Company’s restricted stock awards as of and for the years ended December 31, 2024, and 2023 is presented below.


	2024			2023
	Shares	Weighted Average Grant Date Fair Value		Shares	Weighted Average Grant Date Fair Value
Nonvested shares at beginning of year	257,673	$	46.05	222,280	$	43.31
Granted	130,520	47.03		133,430	44.84
Vested	(108,572)	43.42		(95,954)	37.99
Forfeited	(10,655)	47.51		(2,083)	48.00
Nonvested shares at end of year	268,966	47.53		257,673	46.05

The balance of unearned compensation related to restricted stock grants as of December 31, 2024, 2023 and 2022 was approximately $6.1 million, $6.1 million, and $5.6 million, respectively. At December 31, 2024, the cost is expected to be recognized over a weighted-average period of 1.7 years.

During 2024 and 2023, the Company issued 43,960 and 42,242 performance stock units ("PSUs") with a weighted average grant date fair value of $47.38 and $49.21, respectively, subject to a performance condition tied to tangible book value growth over a three-year period with a potential modifier subject to a total shareholder return ("TSR") performance metric. The Company also granted 43,969 and 42,245 PSUs in 2024 and 2023, 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 TSR performance metric with a weighted average grant date fair value of $47.38 and $49.21, respectively. The fair value of the PSUs 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 time of grant. 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 2024, 2023 and 2022, the Company recognized compensation cost related to these grants of approximately $7.8 million, $4.6 million and $2.3 million, respectively. The balance of unearned compensation related to PSU grants as of December 31, 2024, 2023 and 2022 was approximately $6.2 million, $4.4 million and $3.1 million, respectively.

A summary of the Company's nonvested PSUs for the years ended December 31, 2024, and 2023 is presented below:


	2024			2023
	Shares	Weighted Average Grant Date Fair Value		Shares	Weighted Average Grant Date Fair Value
Nonvested units at beginning of year	146,612	$	48.72	110,254	$	47.15
Granted	87,929	47.38		84,487	49.21
Vested	(65,756)	46.76		(43,182)	45.65
Forfeited	—	—		(4,947)	48.92
Nonvested units at end of year	168,785	47.40		146,612	48.72