Share Based Compensation

3 Months Ended

Mar. 31, 2021

8.	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, 2021. 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, 2021. 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,
	2021		2020

Restricted stock		75,584		52,996
PSU		23,981		20,897

The shares of restricted stock and PSUs shown in the above table cliff vest after a period of three years. The performance feature of the PSUs 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 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 the three month periods ended March 31, 2021 and 2020 we issued 0.005 million and 0.004 million shares, respectively and expensed their value during those same periods.

Total compensation expense recognized for grants pursuant to our long-term incentive plan was $0.3 million and $0.5 million during the three month periods ended March 31, 2021 and 2020, respectively. The corresponding tax benefit relating to this expense was $0.1 million for each period. Total expense recognized for non-employee director share based payments was $0.09 million during both three month periods ended March 31, 2021 and 2020. The corresponding tax benefit relating to this expense was $0.02 million during each period.

At March 31, 2021, the total expected compensation cost related to non-vested restricted stock and PSUs not yet recognized was $3.2 million. The weighted-average period over which this amount will be recognized is 2.3 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, 2021		121,189		$	4.81
Granted		-
Exercised		(19,050	)		3.16
Forfeited		-
Expired		-
Outstanding at March 31, 2021		102,139		$	5.12		2.0	$	1,892

Vested and expected to vest at March 31, 2021		102,139		$	5.12		2.0	$	1,892
Exercisable at March 31, 2021		102,139		$	5.12		2.0	$	1,892

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

	Number of Shares			Weighted- Average Grant Date Fair Value
Outstanding at January 1, 2021		207,117		$	22.70
Granted		99,565			20.81
Vested		(54,982	)		23.53
Forfeited		(10,229	)		22.69
Outstanding at March 31, 2021		241,471		$	21.73

Certain information regarding options exercised during the periods follows:

	Three Months Ended March 31,
	2021		2020
	(In thousands)
Intrinsic value	$	313	$	210
Cash proceeds received	$	60	$	41
Tax benefit realized	$	66	$	44