Stock-Based Compensation

12 Months Ended

Dec. 31, 2019

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

STOCK-BASED COMPENSATION

The Company's shareholders approved the 2018 Omnibus Equity Incentive Plan (the "Plan"), which authorizes the granting of incentive stock options, supplemental stock options, stock appreciation rights, restricted shares, restricted stock units, other stock-based awards and cash-based awards to officers, employees and non-employee directors of, and consultants and advisors to, the Company and its subsidiaries. The Plan authorizes the issuance of up to 2.0 million shares of Company common stock and includes approximately 1.1 million shares of common stock theretofore available under the Company's 2009 Equity Compensation Program but not used. The maximum term of the Company’s stock option grants under the Plan is ten years from the date of grant.

Under the 2009 Equity Compensation Program, 2.3 million shares of common stock of the Company were authorized. The maximum term of the Company’s stock option grants under this plan was ten years from the date of grant. No further awards may be granted from the 2009 program.

In 2014, the Company began issuing restricted stock units ("RSUs"), some of which have performance conditions attached to them.

The Company has outstanding stock options issued to its directors as well as options assumed under the Somerset Hills’ stock option plans at the time of the Company's acquisition of Somerset Hills. As of December 31, 2019 and 2018, respectively, 28,942 and 55,192 options granted to directors were outstanding. As of December 31, 2019 and 2018, there were 2,764 and 12,296 options outstanding, respectively, under the Somerset Hills’ stock option plans.

Excess tax benefits of stock based compensation were $189,000, $318,000 and $587,000 for the years 2019, 2018 and 2017, respectively.

Employee Stock Options

A summary of the status of the Company’s option plans as of December 31, 2019 and the changes during the year ending on that date is represented below.



	Number of Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (in Years)	Aggregate Intrinsic Value
Outstanding, beginning of year	67,488		$	8.28	2.86	$	440,483
Exercised	(35,782	)	8.75
Outstanding, end of year	31,706		$	7.76	0.58	$	305,120
Options exercisable at year-end	31,706		$	7.76	0.58	$	305,120

There were no non-vested options under the Company’s option plans as of December 31, 2019 and no changes to the non-vested options for the year then ended.

As of December 31, 2019, there was no unrecognized compensation expense related to unvested stock options under the 2018 Omnibus Equity Incentive Plan or the 2009 Equity Compensation Program. There was no compensation expense recognized for stock options for 2019 and 2018 and $14,000 of compensation expense for stock options was recognized for 2017.

The aggregate intrinsic values of options exercised in 2019 and 2018 were $265,000 and $406,000, respectively. Exercise of stock options during 2019 and 2018 resulted in cash receipts of $313,000 and $307,000, respectively. No options vested in 2019 and 2018.

Restricted Stock

Information regarding the Company’s restricted stock for the year ended December 31, 2019 is as follows:



	Number of Shares		Weighted Average Price
Outstanding, beginning of year	11,701		$	20.18
Granted	13,052		15.96
Vested	(11,643	)	20.24
Outstanding, end of year	13,110		$	15.93

In 2019, the Company granted 13,052 shares of restricted stock to non-employee directors at a grant date fair value of $15.96 per share under the Company’s 2018 Omnibus Equity Incentive Plan. These shares will vest over a one year period, totaling $208,000 in compensation expense. In 2018, the Company granted 11,575 shares of restricted stock to non-employee directors at a grant date fair value of $20.30 per share under the Company’s 2018 Omnibus Equity Incentive Plan and 2009 Equity Compensation Program. These shares vested over a one year period, totaling $235,000 in compensation expense. In 2017, the Company granted 13,176 shares of restricted stock to non-employee directors at a grant date fair value of $18.20 per share under the Company’s 2009 Equity Compensation Program. These shares vested over a one year period, totaling $240,000 in compensation expense.

The total fair value of the restricted stock vested during the year ended December 31, 2019 was approximately $236,000. Compensation expense recognized for restricted stock was $212,000, $237,000 and $287,000 in 2019, 2018 and 2017, respectively. There was no unrecognized compensation expense related to restricted stock grants as of December 31, 2019.

Restricted Stock Units

Information regarding the Company’s RSUs and changes during the year ended December 31, 2019 is as follows:



	Number of RSUs		Weighted Average Price
Outstanding, beginning of year	299,347		$	16.60
Granted	149,559		16.54
Vested	(138,578	)	13.12
Forfeited	(9,699	)	18.02
Outstanding, end of year	300,629		$	18.13

In 2019, the Company granted 149,559 RSUs at a weighted average grant date fair value of $16.54 per share under the Company’s 2018 Omnibus Equity Incentive Plan. These units vest within a range of two to three years. A portion of these RSUs will vest subject to certain performance conditions in the restricted stock unit agreements. There are also certain provisions in the compensation program which state that if a holder of the RSUs reaches a certain age and years of service, the person has effectively earned a portion of the RSUs at that time. Compensation expense on the RSUs granted in 2019 is expected to average approximately $825,000 per year over a three year period. In 2018, the Company granted 159,233 RSUs at a weighted average grant date fair value of $19.09 per share under the Company’s 2018 Omnibus Equity Incentive Plan and 2009 Equity Compensation Program. These units vest within a range of two to three years. Compensation expense on these restricted stock units is expected to average approximately $1.0 million per year over a three year period. In 2017, the Company granted 132,523 RSUs at a weighted average grant date fair value of $19.92 per share under the Company’s 2009 Equity Compensation Program. Compensation expense on these restricted stock units is expected to average $880,000 per year over a three year period. Compensation expense for restricted stock units totaled $2.3 million, $2.2 million and $2.0 million in 2019, 2018 and 2017, respectively. There was approximately $2.4 million in unrecognized compensation expense related to restricted stock units as of December 31, 2019, which is expected to be recognized over a period of 1.29 years.