Stock Based Compensation

3 Months Ended

Mar. 31, 2016

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

Stock-Based Compensation

Note 9. Stock-Based Compensation

The Company maintains three stock-based compensation plans from which new grants could be issued. The Company’s stock-based compensation plans permit Parent Corporation common stock to be issued to key employees and directors of the Company and its subsidiaries. Grants under the existing plans can be in the form of stock options (qualified or non-qualified), restricted shares, or performance units. Shares available for grant and issuance under the existing plans as of March 31, 2016 are as follows 68,516 under the 2009 Equity Incentive Plan and 235,090 shares under the North Jersey Community Bancorp 2009 Equity Compensation Plan. The Company intends to issue all shares under these plans in the form of newly issued shares.

Restricted stock and option awards typically have a three-year vesting period starting one year after the date of grant with one-third vesting each year. The options generally expire ten years from the date of grant. Restricted stock awards granted to new employees and board members may be granted with shorter vesting periods. Grants of performance units typically have a cliff vesting after 3 years. All issuances are subject to forfeiture if the recipient leaves or is terminated prior to the awards vesting. Restricted shares have the same dividend and voting rights as common stock while options and performance units do not.

All awards are issued at fair value of the underlying shares at the grant date. The Company expenses the cost of the awards, which is determined to be the fair market value of the awards at the date of grant, ratably over the vesting period.

No options were granted during the three months ended March 31, 2016 or 2015.

During the three months ended March 31, 2016 and 2015 a total of 71,920 and 48,507 restricted shares were awarded, respectively. The compensation expense related to restricted stock awards during the quarter ended March 31, 2016 was $182,000.

During 2016 and 2015, the Company granted to various key employees performance unit awards, with each unit entitling the holder to one share of the Company’s common stock contingent upon the Company meeting or exceeding certain return on asset targets over the course of a three-year period commencing on the date of issuance. Under the agreement, and assuming the Company has met or exceeded the applicable targets, grants of performance unit awards will vest on the third anniversary of the grant date or on an earlier date in the event of a change in control, as defined in the agreement. At March 31, 2016, the specific number of shares related to performance unit awards that were expected to vest was 151,577, determined by actual performance in consideration of the established range of the performance targets, which is consistent with the level of expense currently being recognized over the vesting period. Should this expectation change, additional compensation expense could be recorded in future periods or previously recognized expense could be reversed. The maximum amount of performance unit awards is 181,892 shares. The total amount of compensation cost related to performance unit awards included in salary expense during the quarter ended March 31, 2016 and 2015 was $193,000 and $0, respectively.

Option activity under the principal option plans as of March 31, 2016 and changes during the three months ended March 31, 2016 were as follows:

				Weighted-
				Average
		Weighted-		Remaining
		Average		Contractual
		Exercise		Term		Aggregate
	Shares	Price		(In Years)		Intrinsic Value
Outstanding at December 31, 2015	535,906	$	6.48
Granted	-		-
Exercised	(5,495)		7.67
Forfeited/cancelled/expired	(20,839)		9.77
Outstanding at March 31, 2016	509,572	$	6.34		2.92	$	5,102,923
Exercisable at March 31, 2016	503,941	$	6.22		2.90	$	5,071,354

Information related to stock option exercises during 2016:

	2016
Intrinsic value of options exercised	$	54,326
Cash received from options exercised		42,171
Tax benefit realized from options exercised		17,114
Weighted average fair value of options granted		-

The aggregate intrinsic value of options above represents the total pre-tax intrinsic value (the difference between the Company’s closing stock price on March 31, 2016 and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had all option holders exercised their options on March 31, 2016. This amount changes based on the fair market value of the Parent Corporation’s stock.

The below table represents information regarding restricted shares currently outstanding at March 31, 2016:

		Weighted-
		Average
	Nonvested	Grant Date
	Shares	Fair Value
Nonvested at December 31, 2015	96,902	$	16.81
Granted	71,920		15.88
Vested	(54,648)		16.01
Forfeited/cancelled/expired	(1,000)		19.58
Nonvested at March 31, 2016	113,174	$	16.81

As of March 31, 2016, there was $1,806,000 of total unrecognized compensation cost related to nonvested restricted shares granted under the plans. The cost is expected to be recognized over a weighted average period of 24.0 months. The total fair value of shares vested during the quarter ended March 31, 2016, was $686,000.

A summary of the status of unearned performance unit awards and the change during the period is presented in the table below:

		Weighted-
		Average
		Grant Date
	Shares	Fair Value
Unearned at December 31, 2015	94,485	$	19.46
Awarded	64,540		17.15
Forfeited	(7,447)		19.46
Expired	-		-
Unearned at March 31, 2016	151,578	$	19.46

At March 31, 2016, compensation cost of $2,198,000 related to nonvested awards not yet recognized is expected to be recognized over a weighted-average period of 2.3 years.