Stock-Based Compensation

12 Months Ended

Dec. 31, 2020

Share-based Payment Arrangement [Abstract]

STOCK-BASED COMPENSATIONThe Company's 2018 Omnibus Equity Incentive Plan (the "Plan") authorizes the granting of incentive stock options, supplemental stock options, stock appreciation rights, restricted shares, restricted stock units ("RSUs"), 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 authorized the issuance of up to 2.0 million shares of Company common stock. The Company previously granted such awards under the 2009 Equity Compensation Program; however, no further awards may be granted from the 2009 program; however, the maximum term of the stock options granted under this program is ten years from the date of grant.

Restricted Stock

The following is a summary of the Company's restricted stock activity during the year ended December 31, 2020:


	Number of Shares	Weighted Average Price
Outstanding, beginning of year	13,110	$	15.93
Granted	23,852	14.78
Vested	(13,052)	15.96

Outstanding, end of year	23,910	$	14.77

In 2020, the Company granted 23,852 shares of restricted stock to non-employee directors at a grant date fair value of $14.78 per share under the Company’s 2018 Omnibus Equity Incentive Plan. The restricted stock vests one year from the date it was granted. Compensation expense on this restricted stock is expected to be $353,000 over a one-year period. 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 vested over a one year period and totaled $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 and totaled $235,000 in compensation expense.

The total fair value of the restricted stock vested during the year ended December 31, 2020 was approximately $208,000. Compensation expense recognized for restricted stock was $242,000, $212,000 and $237,000 in 2020, 2019 and 2018, respectively. There was $110,000 in unrecognized compensation expense related to restricted stock grants as of December 31, 2020, which is to be recognized over a period of 0.42 years.

Restricted Stock Units

The following is a summary of the Company's RSU activity during the year ended December 31, 2020:


	Number of RSUs	Weighted Average Price
Outstanding, beginning of year	300,629	$	18.13
Granted	176,869	15.34
Vested	(94,432)	18.84
Forfeited	(10,514)	17.82
Outstanding, end of year	372,552	$	16.63

In 2020, the Company granted 176,869 RSUs at a weighted average grant date fair value of $15.34 per share under the Company’s 2018 Omnibus Equity Incentive Plan. The RSUs 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 2020 is expected to average approximately $904,000 per year over a three year period.

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 RSUs vest within a range of two to three years, with compensation expense 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. Compensation expense on these RSUs was expected to average $1.0 million per year over a three year period.

Compensation expense for restricted stock units totaled $2.4 million, $2.3 million and $2.2 million in 2020, 2019 and 2018, respectively. There was approximately $2.5 million in unrecognized compensation expense related to RSUs as of December 31, 2020, which is expected to be recognized over a period of 1.22 years.

Stock Options

The following is a summary of the Company's stock option activity during the year ended December 31, 2020:


	Number of Shares	Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (in Years)	Aggregate Intrinsic Value
Outstanding, beginning of year	31,706	$	7.76	0.58	$	305,120


Expired	(28,942)	7.83

Outstanding, end of year	2,764	$	6.94	1.07	$	15,934
Options exercisable at year-end	2,764	$	6.94	1.07	$	15,934

As of December 31, 2020 there were no outstanding options granted to directors, while 28,942 options granted to directors were outstanding at December 31, 2019. As of both December 31, 2020 and 2019, there were 2,764 options outstanding under the Somerset Hills’ stock option plans. There were no non-vested options under the Company’s option plans as of December 31, 2020 and no changes to the non-vested options for the year then ended.

Excess tax deficiencies on stock based compensation were $132,000 for 2020, while excess tax benefits of stock based compensation totaled $189,000 and $318,000 for the years 2019 and 2018, respectively. As of December 31, 2020, there was no unrecognized compensation expense related to unvested stock options. There was no compensation expense recognized for stock options for 2020, 2019 and 2018.

No stock options were exercised in 2020, while the aggregate intrinsic value of options exercised in 2019 was $265,000 and resulted in cash receipts of $313,000. No options vested in 2020 and 2019.