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Stock-Based Compensation
12 Months Ended
Dec. 31, 2014
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]  
Stock-Based Compensation

NOTE 18. STOCK-BASED COMPENSATION

The Company awards its employees and directors various forms of stock-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 2,985,000 subject to adjustment in certain circumstances to prevent dilution. At December 31, 2014, there were 1,191,000 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 2014, 2013 and 2012. As of December 31, 2014, there was no unrecognized compensation cost related to nonvested share-based compensation arrangements granted related to performance or non-performance based options.

As of December 31, 2014, the Company has 323,151 outstanding restricted shares granted under the plans as compensation to certain employees. These shares carry dividend and voting rights. Sales of these shares are restricted prior to the date of vesting, which is three 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 2014, 2013 and 2012, compensation expense related to these grants was approximately $2,058,000, $1,041,000 and $947,000, respectively. The total income tax benefit related to these grants was approximately $861,000, $152,000 and $170,000 in 2014, 2013 and 2012, 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 stock-based compensation expense on a straight-line basis over the options’ related vesting term. The Company did not record any stock-based compensation expense related to stock options during 2014 and 2013. Stock-based compensation expense related to stock options was approximately $97,000 for 2012. The total income tax benefit related to stock options was approximately $49,000 and $1,000 in 2014 and 2012, respectively. There was no income tax benefit related to stock options in 2013.

The fair value of each stock-based compensation grant is estimated on the date of grant using the Black-Scholes option-pricing model. There were no stock-based compensation grants made in 2014, 2013 and 2012.

 

A summary of the activity of non-performance based and performance based options as of December 31, 2014 is presented below:

 

  Non-Performance Based   Performance Based  
  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

  115,459    $ 17.24      371,000    $ 16.76   

Granted

  -      -      -      -   

Exercised

  (25,395   14.81    $ 148      (6,477   11.05    $ 72   

Forfeited

  (1,953   14.88      (5,192   25.51   
  

 

 

            

 

 

         

Under option, end of year

  88,111    $ 18.00      2.71    $ 884      359,331    $ 16.74      2.11    $ 2,955   
  

 

 

            

 

 

         

Exercisable at end of year

  88,111    $ 18.00      2.71    $ 884      341,030    $ 17.23      2.00    $ 2,629   
  

 

 

            

 

 

         

A summary of the activity of non-performance based and performance based options as of December 31, 2013 is presented below:

 

  Non-Performance Based   Performance Based  
  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

  148,498    $ 16.37      391,321    $ 16.43   

Granted

  -      -      -      -   

Exercised

  (27,657   13.29    $ 107      (4,524   7.47    $ 42   

Forfeited

  (5,382   13.43      (15,797   13.22   
  

 

 

            

 

 

         

Under option, end of year

  115,459    $ 17.24      3.04    $ 641      371,000    $ 16.76      3.12    $ 1,401   
  

 

 

            

 

 

         

Exercisable at end of year

  115,459    $ 17.24      3.04    $ 641      351,856    $ 17.27      3.01    $ 1,145   
  

 

 

            

 

 

         

A summary of the activity of non-performance based and performance based options as of December 31, 2012 is presented below:

 

  Non-Performance Based   Performance Based  
  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

  187,032    $ 15.32      393,891    $ 16.45   

Granted

  -      -      -      -   

Exercised

  -      -    $ -      -      -    $ -   

Forfeited

  (38,534   11.28      (2,570   19.67   
  

 

 

            

 

 

         

Under option, end of year

  148,498    $ 16.37      3.34    $ 1      391,321    $ 16.43      4.16    $ 774   
  

 

 

            

 

 

         

Exercisable at end of year

  148,498    $ 16.37      3.34    $ 1      369,766    $ 17.05      4.05    $ 435   
  

 

 

            

 

 

         

 

A summary of the status of the Company’s restricted stock awards as of and for the years ended December 31, 2014, 2013 and 2012 is presented below:

 

  2014   2013   2012  
  Shares   Weighted-
Average
Grant-Date
Fair Value
  Shares   Weighted-
Average
Grant-Date
Fair Value
  Shares   Weighted-
Average
Grant-Date
Fair Value
 

Nonvested shares at beginning of year

  377,725    $ 11.78      295,075    $ 10.47      301,775    $ 9.14   

Granted

  82,047      20.99      108,400      14.77      62,450      13.15   

Vested

  (126,050   13.12      (21,750   9.31      (68,650   7.06   

Forfeited

  (10,571   15.61      (4,000   9.88      (500   9.96   
  

 

 

      

 

 

      

 

 

   

Nonvested shares at end of year

  323,151      13.46      377,725      11.78      295,075      10.47   
  

 

 

      

 

 

      

 

 

   

The balance of unearned compensation related to restricted stock grants as of December 31, 2014, 2013 and 2012 was approximately $1,568,000, $2,129,000 and $1,608,000, respectively. At December 31, 2014, the cost is expected to be recognized over a weighted-average period of 2.0 years.