Stock-Based Compensation
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Dec. 31, 2014
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-Based Compensation | STOCK-BASED COMPENSATION The Company has equity awards outstanding under two stock-based compensation plans; the 2006 Equity Compensation Plan (the “2006 Plan”) and the 2001 Stock Option Plan. These plans were primarily established to enhance the Company’s ability to attract, retain and motivate employees. The Company’s Board of Directors or, upon delegation, the Compensation Committee of the Board of Directors (“Compensation Committee”) has exclusive authority to select employees, advisors and others, including directors, to receive awards and to establish the terms and conditions of each award made pursuant to the Company’s stock-based compensation plans. The 2006 Plan, approved by the Company’s shareholders in May 2006 and May 2014, was established to consolidate into one plan the benefits available under the 2001 Stock Option Plan and all other then existing share-based award plans (collectively, the “Previous Plans”). The Previous Plans continue with respect to awards made prior to May 2006. All shares of common stock available for future grant under the Previous Plans were transferred into the 2006 Plan. At December 31, 2014, there were 783,007 common shares available for future grant under the 2006 Plan. All awards granted subsequent to March 29, 2010 are for shares of Class A common stock. All awards granted prior to March 29, 2010 are for shares of Class B common stock. Stock Options. All options granted have an exercise price equal to fair market value, which is currently defined as the closing sales price for the stock as quoted on the NASDAQ Stock Market for the last market trading day preceding the date that the Company’s Board of Directors awards the benefit. Options may be subject to vesting as determined by the Company's Board of Directors or Compensation Committee, and can be exercised for periods of up to ten years from the date of grant. Compensation expense related to stock option awards of $905, $1,390 and $1,276 was included in benefits on the Company’s consolidated income statements for the years ended December 31, 2014, 2013 and 2012, respectively. Related income tax benefits recognized for the years ended December 31, 2014, 2013 and 2012 were $346, $531 and $488, respectively. The weighted average grant date fair value of options granted was $3.54 and $4.06 during the years ended December 31, 2013 and 2012, respectively. The fair value of each option award is estimated on the date of grant using the Black-Scholes option pricing model. No stock option awards were granted in 2014. The following table presents the weighted-average assumptions used in the option pricing model for the periods indicated:
Expected dividend yield is based on the Company’s annualized expected dividends per share divided by the average common stock price. Risk-free interest rate is based on the U.S. treasury constant maturity yield for treasury securities with maturities approximating the expected life of the options granted on the date of grant. The expected life of options is based on the Company’s historical exercise and post-vesting termination behaviors. Beginning in 2013, the Company used its own historical volatility of common stock for the expected volatility assumption. Prior to that and subsequent to the Company's initial public offering ("IPO"), which concluded on March 29, 2010, the Company expected the historical volatility of its common stock would not be indicative of future volatility. As such, in 2012 the Company estimated expected volatility based on the share price volatility of a peer group of publicly-traded regional banks of similar size and performance as the Company over the expected life of options. The following table summarizes stock option activity under the Company’s active stock option plans for the year ended December 31, 2014:
The total intrinsic value of fully-vested stock options outstanding as of December 31, 2014 was $14,879. The total intrinsic value of options exercised was $7,363, $7,108 and $1,158 during the years ended December 31, 2014, 2013 and 2012, respectively. The actual tax benefit realized for the tax deduction from option exercises totaled $2,594, $1,963 and $397 for the years ended December 31, 2014, 2013 and 2012, respectively. The Company received cash of $6,299, $9,271 and $1,612 from stock option exercises during the years ended December 31, 2014, 2013 and 2012, respectively. The Company redeemed common stock with aggregate values of $6,829, $8,721 and $2,675 tendered in payment for stock option exercises during the years ended December 31, 2014, 2013 and 2012, respectively. Information with respect to the Company’s nonvested stock options as of and for the year ended December 31, 2014 follows:
As of December 31, 2014, there was $577 of unrecognized compensation cost related to nonvested stock options granted under the Company’s active stock option plans. That cost is expected to be recognized over a weighted-average period of 0.86 years. The total fair value of shares vested during 2014 was $1,363. Restricted Stock Awards. Common stock issued under the Company’s restricted stock plan may not be sold or otherwise transferred until restrictions have lapsed or performance objectives have been obtained. During the vesting periods, participants have voting rights and receive dividends on the restricted shares. Upon termination of employment, common shares upon which restrictions have not lapsed must be returned to the Company. Based on the substantive terms of each award, restricted shares are classified as equity or liability awards. The fair value of equity-classified restricted stock awards is being amortized as compensation expense on a straight-line basis over the period restrictions lapse or performance goals are met. Compensation cost for liability-classified awards is expensed each period from the date of grant to the measurement date based on the fair value of the Company’s common stock at the end of each period. Compensation expense related to restricted stock awards of $2,109, $1,546 and $1,209 was included in benefits on the Company’s consolidated statements of income for the years ended December 31, 2014, 2013 and 2012, respectively. Related income tax benefits recognized for the years ended December 31, 2014, 2013 and 2012 were $807, $591 and $462, respectively. The following table presents information regarding the Company’s restricted stock as of December 31, 2014:
During 2014, the Company issued 148,278 restricted common shares. The 2014 restricted share awards included 73,938 performance restricted shares of which 24,646 vest in varying percentages upon achievement of defined return on asset performance goals, 24,646 vest in varying percentages upon achievement of defined return on equity performance goals and 24,646 vest in varying percentages upon achievement of defined total return to shareholder goals. Vesting of the performance restricted shares is also contingent on employment as of December 31, 2016. Additionally, 74,340 time-restricted shares were issued during 2014 that vest one-third on each annual anniversary of the grant date through February 15, 2017, contingent on continued employment through the vesting date. As of December 31, 2014, there was $3,353 of unrecognized compensation cost related to nonvested restricted stock awards expected to be recognized over a period of 1.60 years. |