Shareholders' Equity and Stock Compensation

Stock-Based Compensation

The compensation cost related to stock options, restricted stock and restricted stock units granted to employees and included in salaries and employee benefits was $2.5 million for the three months ended March 31, 2017, as compared to $3.0 million for the three months ended March 31, 2016. The total income tax benefit recognized related to stock-based compensation was $977,000 for the three months ended March 31, 2017, as compared to $1.2 million for the three months ended March 31, 2016.

The following table summarizes information about stock option activity for the three months ended March 31, 2017:



(in thousands, except per share data)	Three Months Ended March 31, 2017
					Weighted-Avg
	Options		Weighted-Avg		Remaining Contractual	Aggregate
	Outstanding		Exercise Price		Term (Years)	Intrinsic Value
Balance, beginning of period	219		$	15.74
Granted/assumed	—		$	—
Exercised	(19	)	$	12.10
Forfeited/expired	(50	)	$	26.12
Balance, end of period	150		$	12.73	2.97	$	750
Options exercisable, end of period	142		$	12.77	2.80	$	704

The total intrinsic value (which is the amount by which the stock price exceeded the exercise price on the date of exercise) of options exercised during the three months ended March 31, 2017 was $112,000 as compared to the three months ended March 31, 2016 of $132,000.

During the three months ended March 31, 2017, the amount of cash received from the exercise of stock options was $49,000 as compared to the three months ended March 31, 2016 of $33,000. Total consideration was $230,000 for the three months ended March 31, 2017 as compared to the three months ended March 31, 2016 of $635,000.

The Company grants restricted stock periodically for the benefit of employees and directors. Restricted shares generally vest over a three year period, subject to time or time plus performance vesting conditions. The following table summarizes information about nonvested restricted share activity for the three months ended March 31, 2017:



(in thousands, except per share data)	Three Months Ended March 31, 2017
	Restricted		Weighted
	Shares		Average Grant
	Outstanding		Date Fair Value
Balance, beginning of period	1,096		$	15.61
Granted	528		$	18.25
Vested/released	(250	)	$	16.16
Forfeited/expired	(68	)	$	16.71
Balance, end of period	1,306		$	16.51

The total fair value of restricted shares vested and released during the three months ended March 31, 2017 was $4.5 million as compared to the three months ended March 31, 2016 of $4.4 million.

The Company granted restricted stock units in connection with the acquisition of Sterling as replacement awards. Restricted stock unit grants may be subject to performance-based vesting as well as other approved vesting conditions. The total number of restricted stock units granted represents the maximum number of restricted stock units eligible to vest based upon the performance and service conditions set forth in the grant agreements.

The following table summarizes information about nonvested restricted stock unit activity for the three months ended March 31, 2017:



(in thousands, except per share data)	Three Months Ended March 31, 2017
	Restricted		Weighted
	Stock Units		Average Grant
	Outstanding		Date Fair Value
Balance, beginning of period	78		$	18.58
Assumed	—		$	—
Released	(2	)	$	18.58
Forfeited/expired	(3	)	$	18.58
Balance, end of period	73		$	18.58

The total fair value of restricted stock units vested and released during the three months ended March 31, 2017 was $41,000 as compared to the three months ended March 31, 2016 of $260,000.

As of March 31, 2017, there was $15,000 of total unrecognized compensation cost related to nonvested stock options which is expected to be recognized over a weighted-average period of 0.40 years. As of March 31, 2017, there was $13.7 million of total unrecognized compensation cost related to nonvested restricted stock awards which is expected to be recognized over a weighted-average period of 1.99 years. As of March 31, 2017, there was $1.1 million of total unrecognized compensation cost related to nonvested restricted stock units which is expected to be recognized over a weighted-average period of 0.72 years, assuming expected performance conditions are met.

For the three months ended March 31, 2017, the Company received income tax benefits of $1.8 million as compared to the three months ended March 31, 2016 of $1.9 million related to the exercise of non-qualified employee stock options, disqualifying dispositions on the exercise of incentive stock options, the vesting of restricted shares and the vesting of restricted stock units. The tax deficiency or benefit is recorded as income tax expense or benefit in the period the shares are vested.