Share Based Compensation

3 Months Ended

Mar. 31, 2023

Share-Based Payment Arrangement [Abstract]

We maintain share based payment plans that include a non-employee director stock purchase plan and a long-term incentive plan that permits the issuance of share based compensation, including stock options and non-vested share awards. The long-term incentive plan, which is shareholder approved, permits the grant of additional share based awards for up to 0.6 million shares of common stock as of March 31, 2023. The non-employee director stock purchase plan permits the issuance of additional share based payments for up to 0.1 million shares of common stock as of March 31, 2023. Share based awards and payments are measured at fair value at the date of grant and are expensed over the requisite service period. Common shares issued upon exercise of stock options come from currently authorized but unissued shares.

A summary of restricted stock and performance stock units (“PSU”) granted pursuant to our long-term incentive plan follows:


	Three Months Ended March 31,
		2023	2022

Restricted stock		71,346	56,287
PSU		18,790	19,748

The shares of restricted stock and PSUs shown in the above table cliff vest after a period of three years. The performance criteria of the PSUs is split evenly between a comparison of (i) our total shareholder return and (ii) our return on average assets each over the three year period starting on the grant date to these same criteria over that period to an index of our banking peers.

Our directors may elect to receive all or a portion of their cash retainer fees in the form of common stock (either on a current basis or on a deferred basis) pursuant to the non-employee director stock purchase plan referenced above. Shares equal in value to that portion of each director’s fees that he or she has elected to receive in stock on a current basis are

issued each quarter and vest immediately. Shares issued on a deferred basis are credited at the rate of 90% of the current fair value of our common stock and vest immediately. During both three month periods ended March 31, 2023 and 2022 we issued 0.004 million shares and expensed their value during those same periods.

Total compensation expense recognized for grants pursuant to our long-term incentive plan was $0.5 million and $0.4 million during the three month periods ended March 31, 2023 and 2022, respectively. The corresponding tax benefit relating to this expense was $0.1 million during both three month periods ended March 31, 2023 and 2022, respectively. Total expense recognized for non-employee director share based payments was $0.09 million during both three month periods ended March 31, 2023 and 2022, respectively. The corresponding tax benefit relating to this expense was $0.02 million for both three month periods ended March 31, 2023 and 2022, respectively.

At March 31, 2023, the total expected compensation cost related to non-vested restricted stock and PSUs not yet recognized was $3.9 million. The weighted-average period over which this amount will be recognized is 2.2 years.

A summary of outstanding stock option grants and related transactions follows:


	Number of Shares	Average Exercise Price		Weighted- Average Remaining Contractual Term (Years)	Aggregated Intrinsic Value
					(In thousands)
Outstanding at January 1, 2023	40,307	$	8.32
Granted	—	—
Exercised	15,500	6.42
Forfeited	—	—
Expired	—	—
Outstanding at March 31, 2023	24,807	$	9.50	1.8	$	207,728

Vested and expected to vest at March 31, 2023	24,807	$	9.50	1.8	$	207,728
Exercisable at March 31, 2023	24,807	$	9.50	1.8	$	207,728

A summary of outstanding non-vested stock and related transactions follows:


	Number of Shares	Weighted- Average Grant Date Fair Value
Outstanding at January 1, 2023	246,136	$	22.82
Granted	90,136	23.59
Vested	(56,661)	22.80
Forfeited	(2,566)	22.69
Outstanding at March 31, 2023	277,045	$	23.07

Certain information regarding options exercised during the periods follows:


	Three Months Ended March 31,
		2023		2022
	(In thousands)
Intrinsic value		$	223	$	313
Cash proceeds received		$	100	$	50
Tax benefit realized		$	47	$	66