12.

STOCK-BASED COMPENSATION

The Company's 2006 Long-Term Stock Incentive Plan and 2012 Long-Term Stock Incentive Plan allow the granting of shares of the Company's common stock as incentive stock options, nonqualified stock options, restricted stock awards and stock appreciation rights to directors, officers, employees and independent contractors of the Company and its subsidiaries. The total number of shares initially available to grant in active plans was 820,000. There are no shares remaining for issuance with respect to stock option plans approved in 1995, 1998 and 2002; however, options granted under those plans are still included in the numbers below. At December 31, 2014, there were 406,250 additional shares available for grant under the unexpired plans.

Options granted under the long-term stock incentive plans are, in general, exercisable not earlier than one year after the date of grant, at a price equal to the fair value of the common stock on the date of grant, and expire not more than ten years after the date of grant. Stock options may vest during a period of up to five years after the date of grant. Some options granted to officers at or above the senior vice president level were immediately exercisable at the date of grant. The Company has a policy of using new shares to satisfy option exercises.

Changes in options outstanding during 2014 were as follows:

						Weighted
				Weighted		Average		Aggregate
				Average		Remaining		Intrinsic
	Number of			Exercise		Contractual		Value
	Options			Price		Term		(In Thousands)
Balance, January 1, 2014		652,179		$	21.30
Granted during 2014		9,000			18.86
Exercised during 2014		(15,943	)		12.54
Expired during 2014		(279,477	)		27.15
Forfeited during 2014		(20,570	)		13.27
Balance, December 31, 2014		345,189		$	17.38		5.34 years	$	6,813
Vested and expected to vest (1)		314,132		$	17.75		5.34 years	$	255
Exercisable at December 31, 2014		242,565		$	18.88		4.44 years	$	109

(1)

The difference between the shares which are exercisable (fully vested) and those which are expected to vest is due to anticipated forfeitures.

The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value (the difference between the Company's closing stock price on the last trading day of 2014 and the exercise price, multiplied by the number of in-the-money options). The Company's closing stock price on December 31, 2014 was $18.56.

The aggregate intrinsic value of stock options exercised was $109 thousand in 2014, $20 thousand in 2013 and $8 thousand in 2012.

The per share weighted average fair value of stock options granted during 2014, 2013 and 2012 was $7.50, $4.58 and $3.91, respectively, on the date of grant using the Black-Scholes Option-Pricing Model with the following weighted average assumptions:

	2014			2013			2012
Dividend yield		1.02	%		1.30	%		1.47	%
Expected volatility		40	%		39	%		39	%
Expected life		7 Years			7 Years			7 Years
Risk-free interest rate		2.18	%		1.14	%		1.43	%

As of December 31, 2014, there was approximately $280 thousand of unrecognized compensation cost related to non-vested share-based compensation arrangements granted under the Company's stock incentive plans. That cost is expected to be recognized over a weighted average period of 1.2 years.

The Company issued stock awards in 2014, 2013 and 2012. The stock awards were either service based awards or performance based awards. The service based awards vest ratably over a three or five year's period. The performance based awards are dependent upon the Company meeting certain performance criteria and cliff vest at the end of the performance period. As of December 31, 2014, the Company has determined that the performance targets will be met and therefore, the performance awards are being expensed over the vesting period. As of December 31, 2014, there was $4.6 million of total unrecognized compensation cost related to nonvested shares, which is expected to vest over 3.0 years.

Changes in nonvested shares dependent on performance criteria for 2014 were as follows:

			Weighted
			Average
	Number of		Grant Date
	Shares		Fair Value
Balance, January 1, 2014	67,086	$	17.61
Granted during 2014	25,681		19.47
Vested during 2014	—		—
Forfeited during 2014	—		—
Balance, December 31, 2014	92,767	$	17.55

Changes in nonvested shares not dependent on performance criteria for 2014 were as follows:

				Weighted
				Average
	Number of			Grant Date
	Shares			Fair Value
Balance, January 1, 2014		186,455		$	15.11
Granted during 2014		126,014			19.44
Vested during 2014		(54,192	)		14.37
Forfeited during 2014		(5,948	)		18.85
Balance, December 31, 2014		252,328		$	17.34

Total stock-based compensation expense recognized in 2014 totaled $1.5 million for stock awards and $234 thousand for stock options. Total compensation expense for stock awards was $590 thousand and $549 thousand in 2013 and 2012, respectively. The Company recognized total compensation expense for stock options of $319 thousand and $336 thousand in 2013 and 2012, respectively.