Share Based Compensation

3 Months Ended

Mar. 31, 2014

Share Based Compensation [Abstract]

Share Based Compensation

9. Share Based Compensation

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 0.4 million shares of common stock as of March 31, 2014.  The non-employee director stock purchase plan permits the issuance of additional share based payments for up to 0.2 million shares of common stock as of March 31, 2014. 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.

During the first quarter of 2014, pursuant to our performance-based compensation plans, we granted 0.07 million shares of restricted stock and 0.03 million performance stock units (“PSU”) to certain officers.  The shares of restricted stock vest ratably over three years and the PSU’s cliff vest after a period of three years.  The performance feature of the PSU’s is based on a comparison of our total shareholder return over the three year period starting on the grant date to the total shareholder return over that period for a banking index of our peers.  There were no grants pursuant to our performance-based compensation plans during the first quarter of 2013.

Our directors may elect to receive at least a portion of their quarterly 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 are issued each quarter and vest immediately.  We issued 0.004 million shares and 0.024 million shares to directors during the first quarter of 2014 and 2013, respectively and expensed their value during those same periods.

During 2013 a portion of our president’s annual salary was paid in the form of common stock.  The annual amount paid in common stock (also referred to as “salary stock”) was $0.020 million for 2013.

Total compensation expense recognized for grants pursuant to our performance-based compensation plans was $0.2 million and $0.1 million during the three months ended March 31, 2014 and 2013 respectively.  The corresponding tax benefit relating to this expense was $0.1 million and zero for each respective period. Total expense recognized for non-employee director share based payments was $0.05 million and $0.09 million during the three months ended March 31, 2014 and 2013, respectively. The corresponding tax benefit relating to this expense was $0.02 million and zero for each respective period.

At March 31, 2014, the total expected compensation cost related to non-vested stock options, restricted stock, PSU’s and restricted stock unit awards not yet recognized was $2.3 million.  The weighted-average period over which this amount will be recognized is 2.4 years.

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

						Weighted-
						Average
				Average		Remaining		Aggregated
	Number of			Exercise		Contractual		Intrinsic
	Shares			Price		Term (Years)		Value
								(In thousands)
Outstanding at January 1, 2014		320,300		$	4.52
Granted		-
Exercised		(1,935	)		5.25
Forfeited		(2,401	)		4.12
Expired		(284	)		3.46
Outstanding at March 31, 2014		315,680		$	4.52		7.84	$	2,749
Vested and expected to vest at March 31, 2014		303,702		$	4.52		7.80	$	2,649
Exercisable at March 31, 2014		131,297		$	5.13		6.91	$	1,108

A summary of outstanding non-vested restricted stock, restricted stock units and PSU’s and related transactions follows:

			Weighted-
			Average
	Number		Grant Date
	of Shares		Fair Value
Outstanding at January 1, 2014		303,980	$	3.77
Granted		101,104		13.86
Vested		-
Forfeited		-
Outstanding at March 31, 2014		405,084	$	6.29

Certain information regarding options exercised during the periods follows:

	Three Months Ended
	March 31,
	2014		2013
	(In thousands)
Intrinsic value	$	15	$	15
Cash proceeds received	$	10	$	11
Tax benefit realized	$	5	$	-