Share-based payments

12 Months Ended

Dec. 31, 2019

Share-based Payment Arrangement [Abstract]

Share-based payments. Prior to 2018, the Company granted executives and senior management shares of restricted common stock, consisting of time-based shares, which vest on each of the first three anniversaries of the grant date, and performance-based shares, which vest upon achievement of certain financial objectives over the period of three years. Starting in 2018, the Company began granting time-based and performance-based restricted stock units, which have vesting conditions generally similar to the restricted common stock shares awarded previously. Each restricted stock unit represents a contractual right to receive a share of the Company's common stock. The fair value of each restricted common stock or unit granted is based on the closing price of the Company's common stock at grant date.

The aggregate grant-date fair values of restricted share and unit awards during 2019, 2018 and 2017 were $5.1 million (122,400 shares with an average grant price of $42.02), $4.8 million (110,600 shares with an average grant price of $43.39) and $5.7 million (133,000 shares with an average grant price of $42.59), respectively. Awards were made pursuant to the Company’s employee incentive compensation plans and the compensation expense associated with the restricted share-based awards is recognized over the corresponding vesting period as part of employee costs in the consolidated statements of income and comprehensive income. Award forfeitures are recorded as credits against employee costs in the period in which they occur.

Additionally, in 2019, 2018 and 2017, the Company granted its board of directors, as a component of their annual director retainer compensation, approximately 13,700, 14,300 and 13,000 shares, respectively, of common stock that had aggregate fair values of $0.6 million each year. The 2018 and 2017 grants immediately vested at grant date, while the 2019 grants had a one-year restriction. The associated expense for these grants is recognized in other operating expenses in the consolidated statements of income and comprehensive income.

A summary of the restricted common stock award activity during the year ended December 31, 2019 is presented below:



	Shares		Weighted-Average Grant-Date Fair Value per Share ($)

Nonvested balance at January 1, 2019	120,276		40.99
Granted	13,702		41.26
Adjustment for performance-based shares	(40,297	)	42.32
Vested	(33,532	)	39.82
Forfeited	(6,760	)	42.50
Nonvested balance at December 31, 2019	53,389		40.60

A summary of the restricted common stock unit activity during the year ended December 31, 2019 is presented below:



	Units		Weighted-Average Grant-Date Fair Value per Share ($)

Nonvested balance at January 1, 2019	123,841		42.67
Granted	122,358		42.02
Vested	(17,003	)	42.14
Forfeited	(33,179	)	43.21
Nonvested balance at December 31, 2019	196,017		42.21

The fair value of shares that vested in 2019 and 2018 aggregated to $2.1 million and $4.2 million, respectively. For the years ended December 31, 2019, 2018 and 2017, compensation costs recognized in the consolidated statements of income and comprehensive income, presented primarily within employee costs, were approximately $2.1 million, $4.8 million and $5.3 million, respectively. The total tax benefits recognized in the consolidated statements of income and comprehensive income from tax deductions relating to vesting of restricted common stock awards in 2019, 2018 and 2017 were $0.5 million, $1.1 million and $1.2 million, respectively. As of December 31, 2019, compensation costs not yet recognized related to nonvested restricted common stock awards was $4.1 million, which is expected to be recognized over a weighted average period of 1.7 years.