Stock-Based Compensation

9 Months Ended

Sep. 30, 2022

Share-Based Payment Arrangement [Abstract]

The Company recorded total stock-based compensation expense of $0.7 million and $0.5 million for the three months ended September 30, 2022 and 2021, respectively, and $1.9 million and $1.8 million for the nine months ended September 30, 2022 and 2021, respectively. In addition, the Company recognized $170,000 and $123,000 of income tax benefits related to stock-based compensation expense for the three months ended September 30, 2022 and 2021, respectively, and $445,000 and $405,000 for the nine months ended September 30, 2022 and 2021, respectively.

At September 30, 2022, the sole equity-based compensation plan of the Company was the First Bancorp 2014 Equity Plan (the "Equity Plan"), which was approved by shareholders on May 8, 2014. As of September 30, 2022, the Equity Plan had 346,033 shares remaining available for grant.

The Equity Plan is intended to serve as a means to attract, retain and motivate key employees and directors and to associate the interests of the plans' participants with those of the Company and its shareholders. The Equity Plan allows for both grants of stock options and other types of equity-based compensation, including stock appreciation rights, restricted stock, restricted performance stock, unrestricted stock, and performance units.

Recent equity awards to employees have been made in the form of shares of restricted stock awards with service vesting conditions only. Compensation expense for these awards is recorded over the requisite service periods. Upon forfeiture, any previously recognized compensation cost is reversed. Upon a change in control (as defined in the Equity Plan), unless the awards remain outstanding or substitute equivalent awards are provided, the awards become immediately vested.

Certain of the Company’s equity grants contain terms that provide for a graded vesting schedule whereby portions of the award vest in increments over the requisite service period. The Company recognizes compensation expense for awards with graded vesting schedules on a straight-line basis over the requisite service period for each incremental award. Compensation expense is based on the estimated number of stock awards that will ultimately vest. Over the past five years, there have been insignificant amounts of forfeitures, and therefore the Company assumes that all awards granted with service conditions only will vest.

In addition to employee equity awards, the Company's practice is to grant common shares, valued at approximately $32,000 for the current year, to each non-employee director (currently 12 in total) in June of each year. Compensation expense associated with these director awards is recognized on the date of award since there are no vesting conditions.

The following table presents information regarding the activity for the first nine months of 2022 related to the Company’s outstanding restricted stock awards:


	Long-Term Restricted Stock Awards
	Number of Units	Weighted-Average Grant-Date Fair Value
Nonvested at January 1, 2022	206,331	$	35.25
Granted during the period	95,960	38.09
Vested during the period	(52,423)	35.70
Forfeited or expired during the period	(7,115)	31.50
Nonvested at September 30, 2022	242,753	$	36.37

Total unrecognized compensation expense as of September 30, 2022 amounted to $5.5 million with a weighted-average remaining term of 2.3 years. For the nonvested awards that are outstanding at September 30, 2022, the Company expects to record $2.7 million in compensation expense in the next twelve months, $0.7 million of which is expected to be recorded in the remaining quarter of 2022.