Note 6 - Stock-Based Compensation

9 Months Ended

Sep. 30, 2015

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

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

6. 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 September 30, 2015, 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. There were no options granted during the first nine months of 2015 or during 2014.

Option compensation expense was zero for the three months and for the nine months ended September 30, 2015, and September 30, 2014. Stock-based compensation was fully recognized over the requisite service period for all awards. Stock options covering 147,350 shares were exercised in the nine months ended September 30, 2015, compared to zero in the nine months ended September 30, 2014. Cash received totaled $3.4 million and the aggregate intrinsic value totaled $1.3 million from the exercise of stock options during the first nine months ended September 30, 2015. The table below summarizes stock option activity for the periods indicated:

	Shares			Weighted-average Exercise Price		Weighted-average Remaining Contractual Life (in years)		Aggregate Intrinsic Value (in thousands)
Balance, December 31, 2014		2,332,904		$	32.34		1.2	$	1,388
Exercised		(3,750	)		23.37
Forfeited		(808,670	)		35.63
Balance, March 31, 2015		1,520,484		$	30.62		1.6	$	3,156
Exercised		(69,600	)		23.37
Forfeited		(267,884	)		33.99
Balance, June 30, 2015		1,183,000		$	30.37		1.5	$	5,010
Exercised		(74,000	)		23.37
Forfeited		(10,600	)		36.56
Balance, September 30, 2015		1,098,400		$	30.79		1.2	$	3,148
Exercisable, September 30, 2015		1,098,400		$	30.79		1.2	$	3,148

In addition to stock options, the Company also grants restricted stock units to eligible employees which vest subject to continued employment at the vesting dates.

The Company granted restricted stock units for 72,900 shares at an average closing price of $28.11 per share in the first nine months of 2015 compared to 17,601 shares at an average closing price of $24.66 per share in 2014. The restricted stock units granted are scheduled to vest two years from grant date for 2014 grants and to vest three years from grant date for 2015 grants.

The Company granted performance share unit awards in which the number of units earned is calculated based on the relative total shareholder return (“TSR”) of the Company’s common stock as compared to the TSR of the KBW Regional Banking Index. In addition, the Company granted performance share unit awards in which the number of units earned is determined by comparison to the targeted EPS as defined in the award for the next three years. In December 2014, the Company granted performance TSR restricted stock units for 60,456 shares and performance EPS restricted stock units for 57,642 shares to six executive officers. Both the performance TSR and performance EPS units awarded in 2014 are scheduled to vest at December 31, 2017.

The following table presents restricted stock unit activity from December 31, 2014, to September 30, 2015:

	Units
Balance at December 31, 2014		386,465
Granted		72,900
Vested		(24,892	)
Forfeited		(7,846	)
Balance at September 30, 2015		426,627

The compensation expense recorded for restricted stock units was $1.2 million for the three months ended September 30, 2015, compared to $1.0 million in the same period a year ago. For the nine months ended September 30, compensation expense recorded related to the restricted stock units was $3.4 million in 2015 and $2.9 million in 2014. Unrecognized stock-based compensation expense related to restricted stock units was $5.2 million at September 30, 2015, and is expected to be recognized over the next 2.0 years.

At September 30, 2015, 3,358,201 shares were available under the Company’s 2005 Incentive Plan (as Amended and Restated) for future grants.

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

	Three months ended September 30,				Nine months ended September 30,
(Dollars in thousands)	2015		2014		2015			2014
Tax benefit/(short-fall) of tax deductions in excess of grant-date fair value	$	17	$	-	$	(5,602	)	$	(1,177	)
Benefit of tax deductions on grant-date fair value		275		-		6,421			1,177
Total benefit of tax deductions	$	292	$	-	$	819		$	-