Stock-Based Compensation

12 Months Ended

Dec. 31, 2011

Stock-Based Compensation [Abstract]

STOCK-BASED COMPENSATION

NOTE 15 – STOCK-BASED COMPENSATION

For the period from September 8, 2011 through December 31, 2011, the Successor Company had no stock or option grants and had no expenses associated with stock-based compensation.

The Predecessor Company maintained a 2004 Long-Term Incentive Plan, as amended (the “Plan”), whereby a maximum of 500,000 shares of common stock could be issued to directors and employees of the Company and the Bank. The Plan provided for the issuance of awards in the form of stock options, stock appreciation rights, restricted shares, restricted share units, deferred share units and performance awards. Stock options granted under the Plan were typically granted at exercise prices equal to the fair market value of the Company’s common stock on the date of grant and typically had terms of ten years and vested at an annual rate of 20%. Shares of restricted stock awarded under the Plan had restrictions that expired within the vesting period of the award which range from 12 months to 60 months. At December 31, 2010, 170,324 shares remained available for future grant. The compensation cost related to options that has been charged against income for the Plan was approximately $177, $295 and $387 for the period of January 1 through September 7, 2011 and the years ended December 31, 2010 and 2009, respectively. The compensation cost related to restricted stock that had been charged against income for the Plan was approximately $771, $331 and $299 for the period of January 1 through September 7, 2011 and the years ended December 31, 2010 and 2009, respectively. As of December 31, 2010, there was $678 of total unrecognized compensation cost related to non-vested share-based compensation arrangements.

Stock Options

The fair market value of each option award is estimated on the date of grant using the Black-Scholes option pricing model. The Company did not grant any incentive stock options for 2011, 2010 or 2009.

A summary of stock option activity under the Predecessor Company Plan for the years ended December 31, 2010 and 2009 is presented below:

	Stock Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term		Aggregate Intrinsic Value
Outstanding at December 31, 2009		388,194		$	26.14
Exercised		—			—
Forfeited		(6,484	)		33.12
Expired		—			—
Outstanding at December 31, 2010		381,710		$	25.96		3.6 years	$	—
Options exercisable at December 31, 2010		344,029		$	25.17		3.4 years	$	—

The total aggregate intrinsic value of stock options (which is the amount by which the stock price exceeded the exercise price of the stock options) exercised during the years ended December 31, 2010 and 2009, was $0 and $0, respectively. The total fair value of stock options vesting during the period of January 1 through September 7, 2011 and the year ended December 31, 2010 was $319 and $376, respectively.

During 2011 and 2010 there were no exercised stock options.

Stock options outstanding at year-end 2010 were as follows:

	Outstanding						Exercisable
Range of Exercise Prices	Number Outstanding		Weighted Average Remaining Contractual Life		Weighted Average Exercise Price		Number Outstanding		Weighted Average Remaining Contractual Life		Weighted Average Exercise Price
$12.41 - $15.00		24,142		1.8	$	12.95		24,142		1.8	$	12.95
$15.01 - $20.00		77,698		1.8	$	17.63		77,698		1.8	$	17.63
$20.01 - $25.00		50,635		3.1	$	23.36		50,635		3.1	$	23.36
$25.01 - $30.00		135,476		4.7	$	28.00		122,137		4.6	$	27.91
$30.01 - $36.32		93,759		4.4	$	34.80		69,417		3.8	$	34.37
Total		381,710						344,029

Restricted Stock

A summary of restricted stock activity under the Predecessor Company Plan as of September 7, 2011 and for the year ended December 31, 2010 and 2009 is presented below.

Predecessor Company:	Shares			Weighted Average Price Per Share
Balance at January 1, 2009		60,907		$	18.83
Granted:
Non-employee Directors		7,060			7.08
Non-executive officers & management		56,934			7.08
Vested:
Non-employee Directors		(7,852	)		16.56
Executive officers, non-executive officers & management		(10,584	)		19.16
Cancelled:
Non-employee Directors		—			—
Non-executive officers & management		(5,207	)		14.98
Balance at December 31, 2009		101,258		$	11.74
Granted:
Non-employee Directors		6,548			6.11
Executive officers		18,382			8.16
Vested:
Non-employee Directors		(7,060	)		7.08
Executive officers, non-executive officers & management		(20,335	)		12.77
Cancelled:
Executive officers		(1,543	)		16.56
Non-executive officers & management		(5,968	)		11.82
Balance at December 31, 2010		91,282		$	10.67
Granted:
Non-employee Directors		22,336			2.65
Executive officers		72,807			1.60
Vested:
Non-employee Directors		(28,884	)		3.43
Executive officers, non-executive officers & management		(18,716	)		12.66
Cancelled:
Executive officers		(1,029	)		16.56
Non-executive officers & management		(8,646	)		10.88
Balance at September 7, 2011		129,150		$	5.74

Weighted-average fair value of non-vested stock awards granted during the period from January 1 through September 7, 2011 and the year ended December 31, 2010 and 2009:

Predecessor:
Jan 1 – Sept 7, 2011	$	1.54
2010	$	7.62
2009	$	7.08

Cash Settled Stock Appreciation Rights

During the year ended December 31, 2009 the Predecessor Company granted cash-settled stock appreciation rights (“SAR’s”) awards to non-employee Directors, executive officers and select employees. Each award, when granted, provided the participant with the right to receive payment in cash, upon exercise of each SAR, for the difference between the appreciation in market value of a specified number of shares of the Company’s Common Stock over the award’s exercise price. The SAR’s vest over the same period as the stock option awards issued and the restricted stock grants and can only be exercised in tandem with the stock option awards or vesting of the restricted stock grants. The per-share exercise price of an SAR is equal to the closing market price of a share of the Predecessor Company’s common stock on the date of grant. For the year ended December 31, 2010 the Company recognized a recovery in expense of $15 and for the year ended December 31, 2009 the Company recognized an expense of $24 related to outstanding awarded SAR’s. As of December 31, 2010, there was an estimated $346 of unrecognized compensation cost related to SAR’s. The cost, measured at each reporting period until the award is settled, is expected to be recognized over a weighted average period of 1.3 years. As of December 31, 2010, no cash settled SAR’s had been exercised and as such, no share-based liabilities were paid.

A summary of the SAR activity during years ended December 31, 2010 and 2009 is presented below.

Predecessor Company:	Shares			Weighted Average Price Per Share
Balance at January 1, 2009		79,907		$	22.58
Granted:
Non-employee Directors		7,060			7.08
Non-executive officers & management		56,934			7.08
Cancelled/Expired:
Non-employee Directors		(7,852	)		16.56
Non-executive officers & management		(15,817	)		17.78
Balance at December 31, 2009		120,232		$	15.36
Granted:
Non-employee Directors		6,548			6.11
Non-executive officers & management		—			—
Cancelled/Expired:
Non-employee Directors		(7,060	)		7.08
Non-executive officers & management		(27,777	)		12.75
Balance at December 31, 2010		91,943		$	16.12
Granted:
Non-employee Directors		—			—
Non-executive officers & management		—			—
Cancelled:
Non-employee Directors		—			—
Non-executive officers & management		(8,158	)		12.48
Balance at September 7, 2011		83,785		$	16.48
Weighted-average fair value of cash-settled SAR's granted during the year ended December 31,
Predecessor:
Jan 1 – Sept 7, 2011		N/A
2010	$	6.11
2009	$	7.08

The following table illustrates the assumptions for the Black-Scholes model used in determining the fair value of the SAR’s at the time of grant for the periods ending December 31.

	2010	2009
Risk-free interest rate	0.307%	0.67% –1.89%
Volatility	57.06%	40.18%
Expected life	1 year	1 - 5 years
Dividend yield	0.00%	7.34%

Cash-settled SAR’s awarded in stock-based payment transactions are accounted for under ASC 718 which classifies these awards as liabilities. Accordingly, the Predecessor Company recorded these awards as a component of other non-current liabilities on the balance sheet. For liability awards, the fair value of the award, which determines the measurement of the liability on the balance sheet, was remeasured at each reporting period until the award is settled. Fluctuations in the fair value of the liability award were recorded as increases or decreases in compensation cost, either immediately or over the remaining service period, depending on the vested status of the award.

The risk-free interest rate is based upon a U.S. Treasury instrument with a life that is similar to the expected life of the SAR. Expected volatility is based upon the historical volatility of the Company’s common stock based upon prior year’s trading history. The expected term of the SAR is based upon the average life of previously issued stock options and restricted stock grants. The expected dividend yield is based upon current yield on the date of grant. These SAR’s can only be exercised in tandem with stock options being exercised or vesting of restricted stock.