Stock-Based Compensation

3 Months Ended

Mar. 31, 2024

The fair values of stock options and restricted stock awards are amortized as compensation expense on a straight-line basis over the vesting period of the grants. For colleagues who meet the definition of retirement eligible under the 2017 Incentive Compensation Plan and the 2020 Incentive Compensation Plan, expenses related to stock options and restricted stock awards are fully recognized on the date the colleague meets the definition of normal or early retirement. Compensation expense recognized is included in personnel expense on the consolidated statements of income.

A summary of the Corporation’s stock option activity for the three months ended March 31, 2024 is presented below:


Stock Options	Shares(a)	Weighted Average Exercise Price		Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value(a)
Outstanding at December 31, 2023	3,792	$	21.25	4.26 years	$	5,834

Exercised	179	17.27

Outstanding at March 31, 2024	3,613	$	21.45	4.08 years	$	5,299
Options Exercisable at March 31, 2024	3,613	$	21.45	4.08 years	$	5,299

(a) In thousands

Intrinsic value represents the amount by which the fair market value of the underlying stock exceeds the exercise price of the stock option. For the three months ended March 31, 2024, the intrinsic value of stock options exercised was approximately $722,000, compared to approximately $219,000 for the three months ended March 31, 2023. For the three months ended March 31, 2024, the total fair value of stock options vested was approximately $489,000 compared to approximately $955,000 for the three months ended March 31, 2023.

The Corporation also has issued time-based and performance-based restricted stock awards under the 2017 Incentive Compensation Plan and subsequent 2020 Incentive Compensation Plan. Performance awards are based on performance goals determined by the Compensation and Benefits Committee of the Corporation's Board of Directors, with vesting ranging from a minimum of 0% to a maximum of 150% of the target award. Performance awards are valued utilizing a Monte Carlo simulation model to estimate fair value of the awards at the grant date.

The following table summarizes information about the Corporation’s restricted stock awards activity for the three months ended March 31, 2024:


Restricted Stock	Shares(a)	Weighted Average Grant Date Fair Value
Outstanding at December 31, 2023	2,349	$	21.20
Granted	802	21.00
Vested	631	24.39
Forfeited	4	22.05
Outstanding at March 31, 2024	2,516	$	21.33

(a) In thousands

The Corporation amortizes the expense related to restricted stock awards as compensation expense over the vesting period specified in the grant's award agreement. Performance-based restricted stock awards granted during 2023 and 2024 will cliff-vest after the three year performance period has ended. Service-based restricted stock awards granted during 2023 and 2024 will generally vest ratably over a period of four years. Expense for restricted stock awards of $8 million was recorded for the three months ended March 31, 2024, compared to $6 million for the three months ended March 31, 2023. Included in compensation expense for the first three months of 2024 was $3 million of expense for the accelerated vesting of restricted stock awards granted to retirement eligible colleagues. The Corporation had $30 million of unrecognized compensation costs related to restricted stock awards at March 31, 2024 that are expected to be recognized over the remaining requisite service periods that extend predominately through the first quarter of 2028.

The Corporation has the ability to issue shares from treasury or new shares upon the exercise of stock options or the granting of restricted stock awards. The Board of Directors has authorized management to repurchase shares of the Corporation’s common stock, to be made available for issuance in connection with the Corporation’s employee incentive plans and for other corporate purposes. The repurchase of shares, if any, will be based on market and investment opportunities, capital levels, growth prospects, and regulatory constraints. Such repurchases may occur from time to time in open market purchases, block transactions, private transactions, accelerated share repurchase programs, or similar facilities.