Share-Based Compensation

9 Months Ended

Sep. 30, 2014

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

Share-Based Compensation

NOTE 10 — SHARE-BASED COMPENSATION

The following information includes the effects of changes in stock options and exercise prices and restricted stock units resulting from the 10% stock dividend declared on May 15, 2014 and issued on June 30, 2014.

Stock Options

There were no stock options granted during the three months ended September 30, 2014. During the nine months ended September 30, 2014, options to purchase an aggregate of 114,978 shares of voting common stock were granted to certain officers and team members. The options are subject to five-year cliff vesting. The fair values of the options were estimated using the Black-Scholes option pricing model. The following table presents the weighted-average assumptions used and the resulting weighted-average fair value of each option granted.

	September 30, 2014
Weighted-average risk-free interest rate		2.20	%
Expected dividend yield		0.00	%
Weighted-average expected volatility		17.55	%
Weighted-average expected life (in years)		7.00
Weighted-average fair value of each option granted	$	4.45

The following table summarizes stock option activity for the nine months ended September 30, 2014.

	Number of Options			Weighted- average Exercise Price		Weighted- average Remaining Contractual Term in Years		Aggregate Intrinsic Value
	(dollars in thousands, except Weighted-average exercise price)
Outstanding at January 1, 2014		3,057,435		$	12.42
Granted		114,978			17.71
Forfeited		(12,096	)		17.68
Outstanding at September 30, 2014		3,160,317		$	12.59		7.44	$	16,996
Exercisable at September 30, 2014		13,683		$	16.67		2.79	$	48

There were no restricted stock units granted during the three months ended September 30, 2014. During the nine months ended September 30, 2014, 157,459 restricted stock units were granted to certain officers and team members. Of the aggregate restricted stock units, 52,537 were granted under the Bonus Recognition and Retention Program and are subject to five-year cliff vesting. The remainders are subject to three-year cliff vesting. The following table summarizes restricted stock activity for the nine months ended September 30, 2014.

	Restricted Stock Units			Weighted- average Grant- date Fair Value
Outstanding and unvested at January 1, 2014		674,810		$	11.81
Granted		157,459			17.65
Vested		(37,857	)		10.91
Forfeited		(4,597	)		13.54
Outstanding and unvested at September 30, 2014		789,815		$	13.00

Total share-based compensation expense for the nine months ended September 30, 2014 and 2013 was $3.1 million and $2.5 million, respectively.

Customers Bancorp has a policy that permits its directors to elect to receive shares of voting common stock in lieu of their cash retainers. In January 2014, Customers Bancorp issued 28,095 shares of voting common stock with a fair value of $0.5 million to the directors as compensation for their services during 2013. During the nine months ended September 30, 2014, Customers Bancorp issued 22,560 shares of voting common stock with a fair value of $0.4 million to directors as compensation for their services during the first nine months of 2014. The fair values were determined based on the opening price of the common stock on the day the shares were issued.