SHARE BASED COMPENSATION

9 Months Ended

Sep. 30, 2016

Share Based Compensation [Abstract]

SHARE BASED COMPENSATION

Note 8 – Share Based Compensation

At September 30, 2016, the Company had two share based compensation plans in existence, the 2005 Omnibus Stock Plan (“Omnibus Stock Plan”) and the 2015 Omnibus Incentive Plan (“Omnibus Incentive Plan”). The Omnibus Stock Plan expired during the second quarter of 2015 but has outstanding options that may still be exercised. The Omnibus Incentive Plan is described in the following paragraph.

The Company’s Omnibus Incentive Plan was approved on May 6, 2015 and provides for the granting of incentive stock options, non-qualifying stock options, stock appreciation rights, restricted stock grants, restricted stock units and performance awards to selected employees on a periodic basis at the discretion of the board. The Omnibus Incentive Plan authorizes the issuance of up to 1,500,000 shares of common stock, of which 1,403,186are available for issuance at September 30, 2016, has a term of ten years, and is administered by a committee of at least three directors appointed by the board of directors. Options granted under the plan have an exercise price which may not be less than 100% of the fair market value of the common stock on the date of the grant and must be exercised within seven to ten years from the date of grant. The exercise price of stock options must be paid for in full in cash or shares of common stock, or a combination of both. The board committee has the discretion when making a grant of stock options to impose restrictions on the shares to be purchased upon the exercise of such options. The Company generally issues authorized but previously unissued shares to satisfy option exercises.

The fair values of all of the options granted for the periods indicated have been estimated using a binomial option-pricing model. The weighted-average assumptions for the periods shown are presented in the following table:

	Nine Months Ended September 30,
	2016		2015
Dividend yield	3.48	%	3.40	%
Weighted average expected volatility	41.54	%	42.98	%
Weighted average risk-free interest rate	1.42	%	1.42	%
Weighted average expected lives (in years)	5.71		5.42
Weighted average grant-date fair value	$7.75		$7.63

The dividend yield is based on estimated future dividend yields. The risk-free rate for periods within the contractual term of the share option is based on the U.S. Treasury yield curve in effect at the time of the grant. Expected volatilities are generally based on historical volatilities. The expected term of share options granted is generally derived from historical experience.

Compensation expense is recognized on a straight-line basis over the vesting period of the respective stock option or restricted stock grant. The Company recognized compensation expense of $0.5 million and $0.5 million for the three months ended September 30, 2016 and 2015, respectively, related to the awards of stock options and restricted stock grants. Compensation expense of $1.4 million and $1.4 million was recognized for the nine months ended September 30, 2016 and 2015, respectively. The intrinsic value of stock options exercised in the nine months ended September 30, 2016and 2015was $0.4 million and $0.4 million, respectively. The total of unrecognized compensation cost related to stock options was approximately $0.2 million as of September 30, 2016. That cost is expected to be recognized over a weighted average period of approximately 2.0 years. The total of unrecognized compensation cost related to restricted stock was approximately $4.4 million as of September 30, 2016. That cost is expected to be recognized over a weighted average period of approximately 3.2 years. The fair value of the options vested during the nine months ended September 30, 2016 and 2015, was not significant.

In the first quarter of 2016, 21,238 stock options were granted, subject to a three year vesting schedule with one third of the options vesting on April 1^st of each year. The Company granted 78,081 shares of restricted stock in the first quarter of 2016, 10,010 shares are subject to a three year vesting schedule with one third of the shares vesting each year and 59,298 shares are subject to a five year vesting schedule with one fifth of the shares vesting each year. All of these restricted shares will veston April 1^st of each year. An additional 8,773 shares of performance based restricted stock grants were also approved as part of the restricted shares granted in the first quarter. The performance shares are subject to cliff vesting after three years based on the relative performance of the Company’s stock price in comparison to a selected peer group. Vesting can vary from 0-150% of the initial grant based on the results of the Company’s stock performance.

A summary of share option activity for the period indicated is reflected in the following table:

					Weighted
		Number	Weighted		Average	Aggregate
		of	Average		Contractual	Intrinsic
		Common	Exercise		Remaining	Value
		Shares	Share Price		Life (Years)	(in thousands)
Balance at January 1, 2016		134,131	$	19.70		$	974
Granted		21,238	$	27.46
Exercised		(34,646)	$	15.44		$	430
Forfeited or expired		(3,274)	$	25.82
Balance at September 30, 2016		117,449	$	22.19	3.7	$	974
Exercisable at September 30, 2016		78,093	$	19.95	2.6	$	831
Weighted average fair value of options
	granted during the year		$	7.75

A summary of the activity for the Company’s restricted stock for the period indicated is presented in the following table:

	Number	Weighted
	of	Average
	Common	Grant-Date
(In dollars, except share data):	Shares	Fair Value
Restricted stock at January 1, 2016	218,571	$	23.30
Granted	78,081	$	27.42
Vested	(73,975)	$	22.04
Forfeited	(10,719)	$	24.48
Restricted stock at September 30, 2016	211,958	$	25.20