Note 5 - Stock-Based Compensation

3 Months Ended

Mar. 31, 2012

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

5. Stock-Based Compensation

Under the Company’s equity incentive plans, directors and eligible employees may be granted incentive or non-statutory stock options and/or restricted stock units, or awarded non-vested stock.As of March 31, 2012, the only options granted by the Company were non-statutory stock options to selected Bank officers and non-employee directors at exercise prices equal to the fair market value of a share of the Company’s common stock on the date of grant.  Such options have a maximum ten-year term and vest in 20% annual increments (subject to early termination in certain events) except certain options granted to the Chief Executive Officer of the Company in 2005 and 2008.  If such options expire or terminate without having been exercised, any shares not purchased will again be available for future grants or awards.  There were no options granted during 2011 or during the first three months of 2012.

Option compensation expense totaled $194,000 for the three months ended March 31, 2012, and $366,000 for the three months ended March 31, 2011.  Stock-based compensation is recognized ratably over the requisite service period for all awards.  Unrecognized stock-based compensation expense related to stock options totaled $710,000 at March 31, 2012, and is expected to be recognized over the next 10 months.

Stock options covering 39,784 shares were exercised in the first quarter of 2012 compared to 86,860 shares in the first quarter of 2011.  Cash received totaled $647,000 and the aggregate intrinsic value totaled $34,000 from the exercise of stock options during the three months ended March 31, 2012, compared to cash received of $1.3 million and the aggregate intrinsic value of $172,000 from the exercise of stock options during the three months ended March 31, 2011.  The fair value of stock options for 108,027 shares that vested during the first quarter of 2012 was $745,000 compared to the fair value of $2.6 million for 247,842 stock option shares that vested during the first quarter of 2011.  The table below summarizes stock option activity for the periods indicated:

						Weighted-Average		Aggregate
				Weighted-Average		Remaining Contractual		Intrinsic
	Shares			Exercise Price		Life (in years)		Value (in thousands)
Balance, December 31, 2011		4,356,985		$	28.86		3.0	$	37
Exercised		(39,784	)		16.28
Forfeited		(249,506	)		22.27
Balance, March 31, 2012		4,067,695		$	29.40		3.0	$	65
Exercisable, March 31, 2012		3,959,668		$	29.57		2.9	$	65

At March 31, 2012, 2,445,258 shares were available under the Company’s 2005 Incentive Plan for future grants.

In 2011, the Company granted restricted stock units for 147,661 shares.  On March 30, 2012, the Company granted 1,943 restricted stock units.  The restricted stock units granted in 2011 and 2012 are scheduled to vest two years from grant date.
 

The following table presents information relating to the restricted stock units as of March 31, 2012:

	Units
Balance at December 31, 2011		171,410
Granted		1,943
Forfeited		(122	)
Vested		(11,814	)
Balance at March 31, 2012		161,417

The compensation expense recorded related to the restricted stock units was $353,000 for the three months ended March 31, 2012, compared to $96,000 for the three months ended March 31, 2011.  Unrecognized stock-based compensation expense related to restricted stock units was $1.8 million at March 31, 2012, and is expected to be recognized over the next 1.4 years.

The following table summarizes the tax short-fall from share-based payment arrangements:

	For the three months ended March 31,
(Dollars in thousands)	2012			2011
Short-fall of tax deductions in excess of grant-date fair value	$	(565	)	$	(234	)
Benefit of tax deductions on grant-date fair value		663			306
Total benefit of tax deductions	$	98		$	72