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STOCK BASED COMPENSATION | 12 Months Ended
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Dec. 31, 2024
Share-Based Payment Arrangement [Abstract] |
STOCK BASED COMPENSATION | STOCK BASED COMPENSATION The Company’s stock based plans include the 2018 Non-Employee Director St ock Plan (the “2018 Plan”) and the 2023 Omnibus Incentive Plan (the “2023 Plan”), which have been approved by the Company’s Board of Directors and shareholders. Shares from the 2018 Plan may be awarded in the form of stock options or restricted stock, and shares from the 2023 Plan may be awarded in the form of stock options, stock appreciation rights, restricted stock, restricted stock units, or other stock-based awards from its pool of authorized but unissued shares. Upon adoption of the 2023 Plan on May 18, 2023, the Second Amended and Restated 2005 Employee Stock Plan (the “2005 Plan”) was terminated in its entirety and the Company no longer grants awards under the 2005 Plan. However, awards outstanding under the 2005 Plan will continue to remain outstanding in accordance with their terms. The following table presents the amount of cumulatively granted stock option awards and restricted stock awards, net of forfeitures and expirations, granted through December 31, 2024:
|  | Authorized Awards | Cumulatively Granted, Net of Forfeitures and Expirations |  | Total |  | Authorized but Unissued |
Stock Option Awards |  | Restricted Stock Awards |
2005 Plan |  | 1,650,000 |  | 387,258 |  |  | 1,044,533 |  |  | 1,431,791 |  |  | n/a |
2018 Plan |  | 300,000 |  | — |  |  | 62,107 |  |  | 62,107 |  |  | 237,893 |  |
2023 Plan |  | 1,126,886 |  | — |  |  | 153,236 |  |  | 153,236 |  |  | 973,650 |  |
The following table presents the pre-tax expense associated with stock option and restricted stock awards and the related tax benefits recognized for the periods presented:
| Years Ended December 31
| 2024 |  | 2023 |  | 2022
| (Dollars in thousands)
Stock based compensation expense |  |  |  |  |
Restricted stock awards (1) | $ | 5,923 |  |  | $ | 5,777 |  |  | $ | 3,791 |
Directors’ fee expense (2) |  |  |  |  |
Restricted stock awards | 600 |  |  | 600 |  |  | 673 |
Total stock based award expense | $ | 6,523 |  |  | $ | 6,377 |  |  | $ | 4,464 |
Related tax benefits recognized in earnings | $ | 1,834 |  |  | $ | 1,793 |  |  | $ | 1,255 |
(1)Inclusive of compensation expense associated with time-vested and performance-based restricted stock awards. (2)Expense related to awards issued to directors is recognized as directors’ fees within other noninterest expense. The Company has standard form agreements used for stock option and restricted stock awards. The standard form agreements used for the Chief Executive Officer and all other Executive Officers have previously been disclosed in Securities and Exchange Commission filings and generally provide that: (1) any unvested options or unvested restricted stock vest upon a Change of Control; and, that (2) any stock options which vest pursuant to a Change of Control, which is an event described in Section 280G of the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”), will be cashed out at the difference between the acquisition price and the exercise price of the stock option. Stock Options The fair value of each stock option grant is estimated on the date of the grant using the Black-Scholes option-pricing model with the following assumptions used for grants under the identified plans: •Expected volatility is based on the standard deviation of the historical volatility of the weekly adjusted closing price of the Company’s shares for a period equivalent to the expected life of the option. •Expected life represents the period of time that the option is expected to be outstanding, taking into account the contractual term, historical exercise/forfeiture behavior, and the vesting period, if any. •Expected dividend yield is an annualized rate calculated using the most recent dividend payment at time of grant and the Company’s average trailing twelve-month daily closing stock price. •The risk-free rate is based on the U.S. Treasury yield curve in effect at the time of grant for a period equivalent to the expected life of the option. •Forfeitures on stock compensation are recognized when they occur. For the years ended December 31, 2024, 2023 and 2022, there were no awards granted by the Company of nonqualified options to purchase shares of common stock. Under all of the Company’s stock based plans, the option exercise price is based upon the average of the high and low trading value of the stock on the date of grant. Stock option awards granted to date under all plans expire at various dates through 2028. The following table presents relevant information relating to the Company’s stock options for the periods presented:
| Years Ended December 31
| 2024 |  | 2023 |  | 2022
| (Dollars in thousands, except per share data)
Fair value of stock options vested based on grant date fair value | $ | — |  |  | $ | — |  |  | $ | — |
Intrinsic value of stock options exercised | $ | 43 |  |  | $ | 139 |  |  | $ | — |
Cash received from stock option exercises | $ | 80 |  |  | $ | 257 |  |  | $ | — |
Tax benefit realized on stock option exercises | $ | 12 |  |  | $ | 39 |  |  | $ | — |
The following table presents a summary of stock option award activity for the year ended December 31, 2024:
| Outstanding |  |  |  |
| Stock Option Awards |  |  | Weighted Average Exercise Price |  | Weighted Average Remaining Contractual Term (years) |  | Aggregate Intrinsic Value (1) |  |  |  |  |  |  |
| (Dollars in thousands, except per share data) |  |
Balance at January 1, 2024 | 13,334 |  |  |  | $ | 64.94 |  |  |  |  |  |  |  |  |  |  |  |
Granted | — |  |  |  | — |  |  |  |  |  |  |  |  |  |  |  |
Exercised | (1,667) |  |  |  | 48.10 |  |  |  |  |  |  |  |  |  |  |  |
Balance of options outstanding, vested and exercisable at December 31, 2024 | 11,667 |  | (2) |  | $ | 67.35 |  |  | 2.68 years |  | $ | 27 |  |  |  |  |  |  |  |
(1)The aggregate intrinsic value represents the total pre-tax intrinsic value, based on the average of the high price and low price at which the Company’s common stock traded on December 31, 2024 of $64.57, which would have been received by in-the-money option holders had they all exercised their options as of that date. (2)Represents vested stock options outstanding to Directors. At December 31, 2024, all outstanding stock option awards are vested and there is no unrecognized compensation expense related to those options. Restricted Stock The Company grants both time-vested restricted stock awards as well as performance-based restricted stock awards. The fair value of the restricted stock awards is based upon the average of the high and low prices at which the Company’s common stock traded on the date of grant. The holders of time-vested restricted stock awards participate fully in the rewards of stock ownership of the Company, including voting and dividend rights. The holders of performance-based restricted stock awards do not participate in the rewards of stock ownership of the Company until vested. The holders of all restricted stock awards are not required to pay any consideration to the Company for the awards. During the years ended December 31, 2024, 2023, and 2022 the Company made the following restricted stock award grants:
| Shares Granted |  | Plan |  | Fair Value |  | Vesting Period
Time-vested |  |  |  |  |  |  |
2024 |  |  |  |  |  |  |
2/22/2024 | 106,200 |  |  | 2023 |  | $ | 52.73 |  |  | Ratably over 3 years from grant date
4/15/2024 | 1,650 |  |  | 2023 |  | $ | 48.49 |  |  | Ratably over 3 years from grant date
5/21/2024 | 11,340 |  |  | 2018 |  | $ | 52.94 |  |  | Immediately upon grant date
8/15/2024 | 3,703 |  |  | 2023 |  | $ | 59.42 |  |  | Ratably over 3 years from grant date
10/15/2024 | 1,120 |  |  | 2023 |  | $ | 62.32 |  |  | Ratably over 3 years from grant date
12/15/2024 | 1,060 |  |  | 2023 |  | $ | 70.89 |  |  | Ratably over 3 years from grant date
2023 |  |  |  |  |  |  |
2/16/2023 | 77,525 |  |  | 2005 |  | $ | 80.65 |  |  | Ratably over 3 years from grant date
2/16/2023 | 12,309 |  |  | 2005 |  | $ | 80.65 |  |  | Ratably over 5 years, on each anniversary of February 6, 2023 start date
5/15/2023 | 1,080 |  |  | 2005 |  | $ | 46.21 |  |  | Ratably over 3 years from grant date
5/23/2023 | 12,410 |  |  | 2018 |  | $ | 48.35 |  |  | Immediately upon grant date
5/30/2023 | 890 |  |  | 2023 |  | $ | 45.09 |  |  | Ratably over 3 years from grant date
9/15/2023 | 5,270 |  |  | 2023 |  | $ | 51.44 |  |  | Ratably over 5 years from grant date
9/15/2023 | 3,020 |  |  | 2023 |  | $ | 51.44 |  |  | Ratably over 3 years from grant date
12/15/2023 | 460 |  |  | 2023 |  | $ | 66.24 |  |  | Ratably over 3 years from grant date
2022 |  |  |  |  |  |  |
2/17/2022 | 52,100 |  |  | 2005 |  | $ | 84.70 |  |  | Ratably over 5 years from grant date
5/24/2022 | 8,099 |  |  | 2018 |  | $ | 80.39 |  |  | Immediately upon grant date
9/15/2022 | 646 |  |  | 2005 |  | $ | 77.44 |  |  | Ratably over 5 years from grant date
Performance-based |  |  |  |  |  |  |
2/22/2024 | 41,200 |  |  | 2023 |  | $ | 52.73 |  |  | The earlier of: the date on which it is determined if the performance goal has been achieved; or, March 31, 2027.
2/16/2023 | 32,200 |  |  | 2005 |  | $ | 80.65 |  |  | The earlier of: the date on which it is determined if the performance goal has been achieved; or, March 31, 2026.
2/17/2022 | 20,700 |  |  | 2005 |  | $ | 84.70 |  |  | The earlier of: the date on which it is determined if the performance goal has been achieved; or, March 31, 2025.
The following table presents the fair value of restricted stock awards that vested during the periods presented:
| Years Ended December 31
| 2024 |  | 2023 |  | 2022
| (Dollars in thousands)
Fair value of restricted stock awards upon vesting | $ | 4,158 |  |  | $ | 5,003 |  |  | $ | 5,148 |
The following table presents a summary of restricted stock award activity for the year ended December 31, 2024:
| Outstanding Restricted Stock Awards |  |  | Weighted Average Grant Price ($) |  |
Balance at January 1, 2024 | 217,207 |  |  |  | $ | 79.65 |  |  |
Granted | 166,273 |  |  |  | 53.03 |  |  |
Vested/released | (78,563) |  |  |  | 75.48 |  |  |
Forfeited (1) | (27,625) |  |  |  | 69.44 |  |  |
Balance at December 31, 2024 | 277,292 |  |  |  | $ | 65.88 |  |  |
Unrecognized compensation cost (in thousands) |  |  |  |  |  | $ | 9,624 |
Weighted average remaining recognition period (years) |  |  |  |  |  | 1.94 years
(1)Forfeited amounts are inclusive of 2,968 performance-based shares that were not vested based on performance objective criteria results, and 2,871 performance-based shares that were cancelled based on the departure of certain executives of the Company.

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