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Share-Based Payments | 6 Months Ended
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Jun. 30, 2025
Share-Based Payment Arrangement [Abstract] |
Share-Based Payments | Share-Based Payments Stock Compensation Expense Stock-based compensation expense arising from our employee stock purchase plan and share-based compensation plans recognized within operating expenses in the consolidated statements of income amounted to $1.6 million and $1.3 million for the three months ended June 30, 2025 and 2024 and $7.4 million and $6.8 million for the six months ended June 30, 2025 and 2024. Restricted Stock Awards. Restricted stock awards are granted to executive officers and other key employees and members of the Company's Board of Directors. The awards vest, depending on award recipient, either ratably over a period of three or four years or cliff vest after four years. Vesting is accelerated in certain circumstances, including upon retirement. Awards granted to members of the Board of Directors are issued and outstanding upon grant and carry the same voting and dividend rights of unrestricted outstanding common stock. Awards granted to executive officers are eligible to receive dividend equivalent payments during the vesting period, subject to forfeiture under the terms of the agreement, but such awards are not issued or outstanding upon grant and do not provide for voting rights. The grant-date fair value of each restricted stock award is determined based on the market price of the Company's common stock on the date of grant adjusted to exclude the value of dividends for those awards that do not receive dividend or dividend equivalent payments during the vesting period. The following is a summary of stock award activity for the six months ended June 30, 2025:
| Shares |  | Weighted-Average Grant-Date Fair Value
Nonvested, January 1, 2025 | 143,417 |  |  | $ | 68.47 |
Granted | 51,735 |  |  | 74.72 |
Vested | (46,443) |  |  | 59.73 |
Forfeited | (600) |  |  | 67.92 |
Nonvested, June 30, 2025 | 148,109 |  |  | $ | 73.40 |
The fair value of vested awards was $3.5 million and $4.4 million during the six months ended June 30, 2025 and 2024. Stock Performance Awards. Stock performance awards are granted to executive officers and certain other key employees. The awards vest at the end of a three-year performance period. The number of common shares awarded, if any, at the end of the performance period ranges from zero to 150% of the target amount based on two performance measures: i) total shareholder return relative to a peer group and ii) ROE. Vesting of the awards is accelerated in certain circumstances, including upon retirement. The number of common shares awarded on an accelerated vesting is based on actual performance at the end of the performance period. The grant-date fair value of stock performance awards granted during the six months ended June 30, 2025 and 2024 was determined using a Monte Carlo fair value simulation model incorporating the following assumptions:
| 2025 |  | 2024
Risk-free interest rate | 4.28 | % |  | 4.16 | %
Expected term (in years) | 3 |  | 3
Expected volatility | 30.30 | % |  | 35.10 | %
Dividend yield | 2.50 | % |  | 2.40 | %
The risk-free interest rate was derived from yields on U.S. government bonds of a similar term. The expected term of the award is equal to the three-year performance period. Expected volatility was estimated based on actual historical volatility of our common stock. Dividend yield was estimated based on historical and future yield estimates. The following is a summary of stock performance award activity for the six months ended June 30, 2025 (share amounts reflect awards at target):
| Shares |  | Weighted-Average Grant-Date Fair Value
Nonvested, January 1, 2025 | 144,800 |  |  | $ | 68.85 |
Granted | 57,000 |  |  | 73.90 |
Vested | (49,000) |  |  | 53.93 |
Forfeited | — |  |  | — |
Nonvested, June 30, 2025 | 152,800 |  |  | $ | 75.52 |
The fair value of vested awards was $5.5 million and $11.1 million during the six months ended June 30, 2025 and 2024, respectively.

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