STOCK-BASED COMPENSATION

12 Months Ended

Dec. 31, 2011

Stock-Based Compensation

STOCK-BASED COMPENSATION

NOTE 18 STOCK BASED COMPENSATION

Under the terms of an incentive stock option plan adopted during 2001, shares of unissued common stock are reserved for options to officers and key employees of PSB at prices not less than the fair market value of the shares at the date of the grant. Options may be exercised any time after the option grant’s six-month anniversary. These options expire ten years after the grant date, and all currently unexercised options will expire by April 2012. As of December 31, 2011, all 560 options outstanding were eligible to be exercised at an exercise price of $16.83 per share. The following table summarizes information regarding stock options outstanding at December 31, 2011, and activity during the three years ended December 31, 2011, 2010, and 2009.

				Weighted
				Average
	Shares			Price
January 1, 2009		4,476		$	15.96
Options granted		0
Options exercised		0
Option forfeited		(195	)		15.86
December 31, 2009		4,281			15.96
Options granted		0
Options exercised		0
Option forfeited		(636	)		15.84
December 31, 2010		3,645			15.99
Options granted		0
Options exercised		(2,812	)		15.84
Option forfeited		(273	)		15.83
December 31, 2011		560		$	16.83

No common stock options were issued, and no expense was recorded in the three years ended December 31, 2011. As of December 31, 2011, no additional shares of common stock remain reserved for future option grants to officers and key employees under the option plan approved by the shareholders.

PSB granted shares of restricted stock to certain employees having a market value of $200, $75, and $150 during 2011, 2010, and 2009, respectively. The restricted shares vest to employees based on continued PSB service over a six-year period and are recognized as compensation expense over the vesting period. Cash dividends are paid on unvested shares at the same time and amount as paid to PSB common shareholders. Cash dividends paid on unvested restricted stock shares are charged to retained earnings since significantly all restricted shares are expected to vest to employees. As of December 31, 2011, 24,358 shares of restricted stock remained unvested. Unvested shares are subject to forfeiture upon employee termination.

The following table summarizes information regarding unvested restricted stock and shares outstanding during the three years ended December 31, 2011, 2010, and 2009.

	Unvested			Weighted Average
	Shares			Grant Value
January 1, 2009		3,916		$	25.53
Restricted shares granted		10,416			25.53
December 31, 2009		14,332			17.44
Restricted shares granted		4,983			15.05
Restricted shares vested		(785	)		25.53
December 31, 2010		18,530			16.46
Restricted shares granted		8,695			23.00
Restricted shares vested		(2,867	)		17.45
December 31, 2011		24,358		$	18.68

During 2011, total compensation expense of $78 (before tax benefits of $31) was recorded from amortization of restricted shares expected to vest. During 2010, total compensation expense of $43 (before tax benefits of $17) was recorded from amortization of restricted shares expected to vest. During 2009, total compensation expense of $25 (before tax benefits of $10) was recorded from amortization of restricted shares expected to vest. Future projected compensation expense (before tax benefits) assuming all restricted shares eventually vest to employees would be as follows:

2012	$	85
2013		105
2014		85
2015		55
2016		40
Total	$	370