Share-based Compensation

12 Months Ended

Dec. 31, 2020

Share-based Payment Arrangement [Abstract]

The Corporation maintains share-based compensation plans under which it periodically grants share-based awards for a fixed number of shares to directors and certain officers of the Corporation.

Before the TCF/Chemical Merger, Chemical and Legacy TCF granted share-based awards under their respective share-based compensation plans, including the Chemical Stock Incentive Plan of 2019 (the "Stock Incentive Plan of 2019") and the TCF Financial 2015 Omnibus Incentive Plan (the "Legacy TCF Omnibus Incentive Plan"). At December 31, 2020, there were 1,002,931 shares reserved for issuance under the Stock Incentive Plan of 2019 and there were 1,358,516 shares reserved for issuance under the Legacy TCF Omnibus Incentive Plan.

The fair value of share-based awards is recognized as compensation expense over the requisite service or performance period. Compensation expense for share-based awards, including merger-related share-based compensation expense was $46.0 million, $26.3 million and $16.5 million for the years ended December 31, 2020, 2019 and 2018, respectively. The excess tax realized from share-based compensation transactions during the years ended December 31, 2020, 2019 and 2018 was an expense of $2.6 million, a benefit of $2.3 million and a benefit of $2.6 million, respectively.

Restricted Stock Units

The Corporation can grant performance-based restricted stock units ("PRSUs") and time-based restricted stock units ("TRSUs") (collectively referred to as "RSUs") under the Stock Incentive Plan of 2019 and the Legacy TCF Omnibus Incentive Plan; provided that, RSUs granted under the Legacy TCF Omnibus Incentive Plan may only be granted to new employees hired after the TCF/Chemical Merger or employees who previously were employees of Legacy TCF. At December 31, 2020, there were 309,432 PRSUs outstanding dependent on achieving certain performance target levels and the grantee completing the requisite service period. The TRSUs vest upon satisfaction of a service condition. Upon achievement of the satisfaction of a service condition and/or performance target level, as applicable, the TRSUs are converted into shares of TCF Financial's common stock on a one-to-one basis and the PRSUs are converted into shares of TCF Financial's common stock in accordance with the achievement of the performance target (ranging from 0% to 150% of the granted PRSUs). Compensation expense related to RSUs is recognized over the expected requisite performance or service period, as applicable.

A summary of the activity for RSUs for the years ended December 31, 2020, 2019 and 2018 is presented below:


	Number of Units	Weighted-average Grant Date Fair Value Per Unit
Outstanding at December 31, 2017	360,988	$	15.17
Outstanding at December 31, 2017 as adjusted for conversion	183,419	29.86
Granted	60,181	43.78

Forfeited/canceled	(10,411)	28.59
Vested	(26,609)	28.81
Outstanding at December 31, 2018	406,575	17.33
Outstanding at December 31, 2018 as adjusted for conversion	206,580	34.11
Granted	638,138	41.99

Acquired in the TCF/Chemical Merger(1)	879,779	47.36
Forfeited/canceled	(26,347)	43.43
Vested	(186,330)	38.11
Outstanding at December 31, 2019	1,511,820	44.49

Granted	1,542,671	24.67

Forfeited/canceled	(83,818)	32.06
Vested	(955,159)	41.51
Outstanding at December 31, 2020	2,015,514	31.25

(1)Inclusive of certain Legacy TCF PRSUs which were converted at their maximum payout into 55,022 TRSUs with a weighted-average grant date fair value per unit of $42.06.

Unrecognized compensation expense related to RSUs totaled $43.1 million at December 31, 2020 and is expected to be recognized over the remaining weighted-average period of 2.5 years.

Restricted Stock Awards

The Corporation's restricted stock award transactions were as follows:


	Number of Awards	Weighted-Average Grant Date Fair Value Per Award
Outstanding at December 31, 2017	2,639,663	$	13.65
Outstanding at December 31, 2017 as adjusted for conversion	1,341,136	26.86
Granted	387,909	42.61

Forfeited/canceled	(119,366)	29.77
Vested	(446,447)	24.09
Outstanding at December 31, 2018	2,289,446	$	16.70
Outstanding at December 31, 2018 as adjusted for conversion	1,163,232	32.87
Granted	269,915	40.82

Forfeited/canceled	(136,489)	34.18
Vested	(408,353)	34.37
Outstanding at December 31, 2019	888,305	40.67

Granted	54,040	25.91
Forfeited/canceled	(12,927)	39.96
Vested	(424,256)	41.08
Outstanding at December 31, 2020	505,162	$	38.57

At December 31, 2020, there were no shares of performance-based restricted stock awards outstanding. Unrecognized stock compensation expense for restricted stock awards was $8.7 million at December 31, 2020 with a weighted-average remaining amortization period of 1.8 years.

The following table provides information regarding total expense for restricted stock awards:


	Year Ended December 31,
(In thousands)	2020		2019		2018
Restricted stock expense related to employees(1)	$	26,906	$	15,218	$	16,549
Restricted stock expense related to directors(2)	918		950		—
Total restricted stock expense	$	27,824	$	16,168	$	16,549

(1)Included in "Compensation and employee benefits" in the Consolidated Statements of Income.

(2)Included in "Other noninterest expense" in the Consolidated Statements of Income.

Stock Options

A summary of activity for the Corporation's stock options is presented below:


	Non-Vested Stock Options Outstanding			Stock Options Outstanding
	Number of Options	Weighted-average Exercise Price		Number of Options	Weighted-average Exercise Price
Outstanding at December 31, 2017	—	$	—	366,000	$	15.75
Outstanding at December 31, 2017 as adjusted for conversion	—	—		185,964	31.00

Exercised	—	—		(185,964)	31.00


Outstanding at December 31, 2018	—	—		—	—

Acquired in the TCF/Chemical Merger(1)	127,906	39.38		520,379	29.48

Exercised	—	—		(25,602)	30.10
Forfeited/canceled	(5,953)	32.81		—	—
Expired	—	—		(756)	32.81
Vested	(1,144)	46.95		1,144	46.95
Outstanding at December 31, 2019	120,809	39.63		495,165	29.48

Exercised	—	—		(101,913)	21.07
Forfeited/canceled	(3,659)	38.18		—	—
Expired	—	—		(53,044)	39.08
Vested	(61,428)	38.26		61,428	38.26
Outstanding at December 31, 2020	55,722	$	41.23	401,636	$	31.69
Exercisable/vested at December 31, 2020				401,636	$	31.69

(1)Options acquired in the TCF/Chemical Merger expire ten years from the date of grant and vest ratably over a five-year period.

The weighted-average remaining contractual term was 4.0 years for all stock options outstanding and 3.8 years for all exercisable stock options at December 31, 2020. The intrinsic value of all outstanding in-the-money stock options and exercisable in-the-money stock options was $2.9 million and $2.8 million, respectively, at December 31, 2020. The aggregate intrinsic values of outstanding and exercisable options at December 31, 2020 were calculated based on the closing market price of TCF Financial's common stock on December 31, 2020 of $37.02 per share less the exercise price. Options with intrinsic values less than zero, or "out-of-the-money" options, are not included in the aggregate intrinsic value reported.

During the year ended December 31, 2020, $2.1 million cash was received from option exercises.

At December 31, 2020, unrecognized compensation expense related to stock options totaled $189 thousand and is expected to be recognized over a remaining weighted average period of 1.1 years.