STOCK-BASED COMPENSATION

12 Months Ended

Dec. 31, 2024

STOCK-BASED COMPENSATION

STOCK-BASED COMPENSATION

17. STOCK-BASED COMPENSATION

In May 2021, the Company’s stockholders approved the Dime Community Bancshares, Inc. 2021 Equity Incentive Plan (the “2021 Equity Incentive Plan”) to provide the Company with sufficient equity compensation to meet the objectives of appropriately incentivizing its officers, other employees, and directors to execute our strategic plan to build shareholder value, while providing appropriate shareholder protections. The Company no longer makes grants under the Legacy Stock Plans. Awards outstanding under the Legacy Stock Plans will continue to remain outstanding and subject to the terms and conditions of the Legacy Stock Plans. An additional 1,185,000 shares of common stock were reserved to be issued under the 2021 Equity Incentive Plan following stockholder approval at the Annual Meeting of Shareholders on May 23, 2024. At December 31, 2024, there were 1,493,586 shares reserved for issuance under the 2021 Equity Incentive Plan.

Stock Option Activity

The following table presents a summary of activity related to stock options granted under the Legacy Stock Plans, and changes during the period then ended:

				Weighted-
				Average
		Weighted-		Remaining	Aggregate
	Number of	Average Exercise		Contractual	Intrinsic
(Dollars in thousands except share and per share amounts)	Options	Price		Years	Value
Options outstanding at January 1, 2024	26,995	$	35.39	5.2		—
Options exercised	—		—
Options forfeited	—		—
Options outstanding at December 31, 2024	26,995	$	35.39	4.2	$	—
Options vested and exercisable at December 31, 2024	26,995	$	35.39	4.2	$	—

Information related to stock options during each period is as follows:

	Year Ended December 31,
(In thousands)	2024		2023		2022
Cash received for option exercise cost	$	—	$	—	$	—
Income tax (expense) benefit recognized on stock option exercises		—		—		—
Intrinsic value of options exercised		—		—		—

The range of exercise prices and weighted-average remaining contractual lives of both outstanding and vested options (by option exercise cost) as of December 31, 2024 were as follows:

	Outstanding Options		Vested Options
		Weighted		Weighted
		Average		Average
	Number	Contractual	Number	Contractual
	of	Years	of	Years
	Options	Remaining	Options	Remaining
Exercise Prices:
$34.87	10,061	5.1	10,061	5.1
$35.35	9,802	4.1	9,802	4.1
$36.19	7,132	3.1	7,132	3.1
Total	26,995	4.2	26,995	4.2

Restricted Stock Awards

The Company has made RSA grants to outside Directors and certain officers under the Legacy Stock Plans and the 2021 Equity Incentive Plan. Typically, awards to outside Directors fully vest on the first anniversary of the grant date, while awards to officers vest over a pre-determined requisite period. All awards were made at the fair value of the Company’s common stock on the grant date. Compensation expense on all RSAs is based upon the fair value of the shares on the respective dates of the grant.

The following table presents a summary of activity related to the RSAs granted, and changes during the period then ended:

		Weighted-
		Average
	Number of	Grant-Date
	Shares	Fair Value
Unvested allocated shares outstanding at January 1, 2024	356,795	$	26.88
Shares granted	319,924		20.62
Shares vested	(170,540)		26.98
Shares forfeited	(35,943)		24.15
Unvested allocated shares outstanding at December 31, 2024	470,236	$	22.79

Information related to RSAs during each period is as follows:

	Year Ended December 31,
(In thousands)		2024		2023		2022
Compensation expense recognized	$	5,780	$	4,003	$	3,516
Income tax expense recognized on vesting of RSAs		(317)		(188)		(10)

As of December 31, 2024, there was $5.6 million of total unrecognized compensation cost related to unvested RSAs to be recognized over a weighted-average period of 1.7 years.

Performance-Based Share Awards

The Company maintains a Long Term Incentive Plan (“LTIP”) for certain officers, which meets the criteria for equity-based accounting. For each award, threshold (50% of target), target (100% of target) and stretch (150% of target) opportunities are eligible to be earned over a three-year performance period based on the Company’s relative performance on certain goals that were established at the onset of the performance period and cannot be altered subsequently. Shares of common stock are issued on the grant date and held as unvested stock awards until the end of the performance period. Shares are issued at the stretch opportunity in order to ensure that an adequate number of shares are allocated for shares expected to vest at the end of the performance period. Compensation expense on PSAs is based upon the fair value of the shares on the date of the grant for the expected aggregate share payout as of the period end.

During the year ended December 31, 2024 and 2023, 96,049 shares and 195,066 shares have been granted, respectively.  

The following table presents a summary of activity related to the PSAs granted, and changes during the period then ended:

		Weighted-
		Average
	Number of	Grant-Date
	Shares	Fair Value
Maximum aggregate share payout at January 1, 2024	222,240	$	20.64
Shares granted	96,049		18.61
Shares forfeited	(47,054)		24.75
Shares vested	(12,371)		29.97
Maximum aggregate share payout at December 31, 2024	258,864	$	18.69
Minimum aggregate share payout	—		—
Expected aggregate share payout	248,381	$	18.35

Information related to PSAs during each period is as follows:

	Year Ended December 31,
(In thousands)	2024		2023		2022
Compensation expense recognized	$	910	$	635	$	760
Income tax (expense) benefit recognized on vesting of PSAs		(52)		—		193

As of December 31, 2024, there was $2.5 million of total unrecognized compensation cost related to unvested PSAs based on the expected aggregate share payout to be recognized over a weighted-average period of 1.8 years.