Share-based Incentive Plans

3 Months Ended

Mar. 31, 2015

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Share-based Incentive Plans

Share-based Incentive Plans

2009 Incentive Plan

On April 16, 2009, our shareholders approved the Southside Bancshares, Inc. 2009 Incentive Plan (the “2009 Incentive Plan”), which is a stock-based incentive compensation plan.  A total of 1,407,103 shares of our common stock were reserved and available for issuance pursuant to awards granted under the 2009 Incentive Plan.  Under the 2009 Incentive Plan, we were authorized to grant nonqualified stock options (“NQSOs”), restricted stock units (“RSUs”), or any combination thereof to certain officers. During the three months ended March 31, 2015, we granted RSUs and NQSOs pursuant to the 2009 Incentive Plan. During the three months ended March 31 2014, there were no grants of RSUs or NQSOs pursuant to the 2009 Incentive Plan.

As of March 31, 2015, there were 299,306 unvested awards outstanding.  For the three months ended March 31, 2015, there was share-based compensation expense of $273,000 with an associated income tax benefit for the three months of $95,000. As of March 31, 2014, there were 424,169 unvested awards outstanding.  Share-based compensation expense for the three months ended March 31, 2014 was $286,000 with an associated income tax benefit for the three months of $100,000.

As of March 31, 2015 and 2014, there was $2.2 million and $2.8 million of unrecognized compensation cost, respectively, related to the unvested awards outstanding. The remaining cost at March 31, 2015 is expected to be recognized over a weighted-average period of 2.8 years.  

The NQSOs have contractual terms of 10 years and vest in equal annual installments over three- and four-year periods.

The fair value of each RSU is the closing stock price on the date of grant.  The RSUs vest in equal annual installments over three- and four-year periods.

Each award is evidenced by an award agreement that specifies the exercise price, if applicable, the duration of the award, the number of shares to which the award pertains, and such other provisions as the Board determines.

Shares issued in connection with stock compensation awards are issued from authorized shares and not from treasury shares.  During the three months ended March 31, 2015 and 2014, there were 2,974 and 2,515 shares, respectively, issued in connection with stock compensation awards from available authorized shares.

The following table presents activity related to our RSUs and NQSOs as of March 31, 2015.

			Restricted Stock Units Outstanding				Stock Options Outstanding
	Shares Available for Grant		Number of Shares		Weighted- Average Grant-Date Fair Value		Number of Shares		Weighted- Average Exercise Price		Weighted- Average Grant-Date Fair Value
Balance, January 1, 2015	821,604		31,753		$	21.75	419,334		$	19.88	$	6.00
Granted	(68,098	)	15,097		25.46		53,001		25.46		7.25
Stock options exercised	—		—		—		(2,974	)	17.74		5.28
Stock awards vested	—		—		—		—		—		—
Forfeited	13,000		(1,700	)	25.23		(11,300	)	22.52		6.63
Canceled/expired	—		—		—		—		—		—
Balance, March 31, 2015	766,506		45,150		$	22.86	458,061		$	20.47	$	6.13

Other information regarding options outstanding and exercisable as of March 31, 2015 is as follows:

				Options Outstanding				Options Exercisable
Range of Exercise Prices				Number of Shares	Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Life in Years	Number of Shares	Weighted- Average Exercise Price
$	15.79	-	$25.46	458,061	$	20.47	7.77	203,905	$	18.42
Total				458,061	$	20.47	7.77	203,905	$	18.42

The total intrinsic value (i.e., the amount by which the fair value of the underlying common stock exceeds the exercise price of a stock option) of outstanding stock options and exercisable stock options was $3.1 million and $1.8 million at March 31, 2015, respectively.

Cash received from stock options exercised for the three months ended March 31, 2015 and 2014 was $53,000 and $42,000, respectively. The total intrinsic value related to stock options exercised during the three months ended March 31, 2015 and 2014, was approximately $28,000 and $24,000, respectively.