STOCK PLANS

9 Months Ended

Sep. 30, 2012

Disclosure Of Compensation Related Costs, Share-Based Payments [Abstract]

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

3. STOCK PLANS

     On April 24, 2012, shareholders approved Bancorp’s 2012 Omnibus Incentive Plan (the “2012 Incentive Plan”). Bancorp's 2002 Stock Incentive Plan (the “2002 Plan”) was terminated on March 8, 2012, and no additional awards will be granted under the 2002 Plan. The 2012 Incentive Plan authorizes the issuance of up to 400,000 shares to participants in connection with grants of stock options, restricted stock, restricted stock units, stock appreciation rights, and other stock-based awards. The 2012 Incentive Plan has 372,166 shares available for grant at September 30, 2012. The number of shares that may be issued under the 2012 Incentive Plan is subject to adjustment in certain circumstances.

It is Bancorp’s policy to issue new shares for stock option exercises and restricted stock awards. Bancorp expenses stock options and restricted stock on a straight line basis over the applicable vesting term. Restricted stock granted under the 2002 Plan generally vested over a one, two to four year vesting period; including grants to directors. All outstanding stock options have an exercise price that was equal to the closing market value of Bancorp’s stock on the date the options were granted. Options granted under the 2002 Plan generally vested over a two to four year vesting period; however, certain grants were made that vested immediately, including grants to directors. Stock options have a 10 year maximum term.

The following table presents information on stock options outstanding for the period shown:

	Nine months ended
	September 30, 2012
			Weighted Average
	Common Shares		Exercise Price per share
Balance, beginning of period	257,080		$	70.12
Granted	-			-
Exercised	(7,945	)		11.55
Forfeited/expired	(43,714	)		75.93
Balance, end of period	205,421		$	71.15

The following table presents information on stock options outstanding for the periods shown:

	Nine months ended		Nine months ended
(Dollars in thousands, except share and per share data)	September 30, 2012		September 30, 2011
Stock options vested and expected to vest:
Number		205,421		253,461
Weighted average exercise price per share	$	71.15	$	69.93
Aggregate intrinsic value	$	691	$	174
Weighted average contractual term of options		3.9 years		4.4 years
Stock options vested and currently exercisable:
Number		205,371		252,990
Weighted average exercise price per share	$	71.16	$	70.14
Aggregate intrinsic value	$	690	$	179
Weighted average contractual term of options		3.9 years		4.3 years
Unearned compensation related to stock options	$	-	$	28

There were no stock option grants for the nine months ended September 30, 2012, and 2011.

       The following table presents information on restricted stock outstanding for the period shown:

	Nine months ended
	September 30, 2012
			Weighted Average Market
	Restricted Shares		Price at Grant
Balance, beginning of period	264,631		$	16.98
Granted	29,673			19.05
Vested	(95,132	)		18.18
Forfeited	(19,714	)		15.89
Balance, end of period	179,458		$	16.80
Weighted average remaining recognition period	1.8 years

       The balance of unearned compensation related to restricted shares as of September 30, 2012, and September 30, 2011, was $2.4 million and $3.8 million, respectively.

       The following table presents stock-based compensation expense for the periods shown:

	Three months ended				Nine months ended
	September 30,				September 30,
(Dollars in thousands)	2012		2011		2012		2011
Restricted stock expense	$	375	$	409	$	1,153	$	1,384
Stock option expense		-		14		15		68
Total stock-based compensation expense	$	375	$	423	$	1,168	$	1,452

       The income tax benefit recognized in the income statement for restricted stock compensation expense in the three and nine months ended September 30, 2012, was $131,000 and $404,000, respectively. The income tax benefit recognized in the income statement for restricted stock compensation expense in the three and nine months ended September 30, 2011, was $155,000 and $526,000, respectively.

       The cash received from stock option exercises was $22,000 and $92,000 for the three and nine months ended September 30, 2012, respectively. The Company recorded $13,000 and $168,000 of tax expense from disqualifying dispositions involving incentive stock options, the exercise of non-qualified stock options, and the vesting and release of restricted stock for the nine months ended September 30, 2012 and September 30, 2011, respectively.