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EMPLOYEE STOCK COMPENSATION | 9 Months Ended
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Sep. 30, 2023
Share-Based Payment Arrangement [Abstract] |
EMPLOYEE STOCK COMPENSATION | EMPLOYEE STOCK COMPENSATION On May 31, 2018, our stockholders approved the Company’s 2018 Omnibus Stock Incentive Plan (“2018 Omnibus Plan”). The 2018 Omnibus Plan provides that the maximum number of shares available for awards is 4,417,882. As of September 30, 2023, there were 1,904,116 shares available for future awards. Stock-based Compensation Expense The following table presents total stock-based compensation expense and the related tax benefits for the periods indicated:
|  | Three Months Ended September 30, |  | Nine Months Ended September 30,
($ in thousands) |  | 2023 |  | 2022 |  | 2023 |  | 2022
Restricted stock awards and units |  | $ | 1,581 |  |  | $ | 1,715 |  |  | $ | 4,762 |  |  | $ | 4,482 |
Related tax benefits |  | $ | 457 |  |  | $ | 495 |  |  | $ | 1,377 |  |  | $ | 1,295 |
Total stock-based compensation expense represents the cost of service-based restricted stock units, performance-based restricted stock units and performance-based restricted stock units with market conditions. At September 30, 2023, unrecognized compensation expense totaled $11.6 million and will be recognized over a weighted average remaining period of 2.4 years. Restricted Stock Awards and Restricted Stock Units We have granted restricted stock awards and restricted stock units to certain employees, officers, and directors. The restricted stock awards and units are measured based on grant-date fair value, which generally reflect the closing price of our stock on the date of grant. For awards containing market conditions, we engage a third party to perform a valuation analysis using a Monte Carlo simulation model to determine grant-date fair value. The restricted stock awards and units fully vest after a specified period (generally ranging from one to five years) of continued service from the date of grant plus, in some cases, the satisfaction of performance and/or market conditions. Such targets include conditions relating to our profitability, our total shareholder return (TSR), stock price and regulatory standing. The actual amounts of stock released upon vesting will be determined by the Compensation, Nominating and Corporate Governance Committee of our Board of Directors (the “CNG Committee”) upon its certification of the satisfaction of the target level of performance. We recognize an income tax deduction in an amount equal to the taxable income reported by the holders of the restricted stock, generally upon vesting or, in the case of restricted stock units, when settled. The following table presents unvested restricted stock awards and restricted stock units activity for the three and nine months ended September 30, 2023:
|  | Three Months Ended September 30, 2023 |  | Nine Months Ended September 30, 2023
|  | Number of Shares |  | Weighted Average Grant Date Fair Value Per Share |  | Number of Shares |  | Weighted Average Grant Date Fair Value Per Share
Outstanding at beginning of period |  | 1,350,210 |  |  | $ | 14.61 |  |  | 1,403,245 |  |  | $ | 14.68 |
Granted (1) |  | 41,015 |  |  | $ | 14.02 |  |  | 415,215 |  |  | $ | 15.87 |
Vested (2) |  | (6,624) |  |  | $ | 14.10 |  |  | (289,701) |  |  | $ | 17.39 |
Forfeited (3) |  | (44,092) |  |  | $ | 17.74 |  |  | (188,250) |  |  | $ | 13.68 |
Outstanding at end of period (4) |  | 1,340,509 |  |  | $ | 14.60 |  |  | 1,340,509 |  |  | $ | 14.60 |
(1)There were zero and 79,784 performance-based shares/units included in shares granted for the three and nine months ended September 30, 2023. (2)There were zero and 66,699 performance-based shares/units included in vested shares for the three and nine months ended September 30, 2023. (3)The number of forfeited shares included aggregate performance-based shares/units of 26,076 and 150,958 for the three and nine months ended September 30, 2023. (4)Includes 780,514 performance-based shares/units at September 30, 2023. As a result of the pending merger with PacWest, the CNG Committee approved the cancellation of performance-based restricted stock unit (“PSU”) awards granted with stock price targets, subject to the closing of the merger with PacWest. As of September 30, 2023, we have 590,162 shares of stock-price based PSU awards subject to cancellation upon closing of the merger. The merger agreement also provides that, at the merger closing date, outstanding PSU awards, other than stock-price based PSUs, will vest and be settled within five business days from the merger close date, with performance deemed achieved at the target level of performance. As of September 30, 2023, we have 190,352 shares of PSU awards granted with performance conditions other than stock-price subject to immediate vesting upon closing of the merger. The expense associated with the immediate vesting of these awards will be recognized at the legal close of the merger. Additionally, any restricted stock unit awards granted to a non-employee member of the Company’s Board of Directors will vest and will be settled within five business days after the merger closing date. All other time-based restricted stock unit awards outstanding immediately prior to the merger close date will remain outstanding and subject to the same terms and conditions prior to the merger. Stock Options We have issued stock options to certain employees, officers, and directors. Stock options are issued at the closing market price immediately before the grant date and generally have a three to five year vesting period and contractual terms of seven to ten years. We recognize an income tax deduction upon exercise of a stock option to the extent taxable income is recognized by the option holder. In the case of a non-qualified stock option, the option holder recognizes taxable income based on the fair market value of the shares acquired at the time of exercise less the exercise price. There were no stock options granted and no unvested stock options as of September 30, 2023 and December 31, 2022. The following tables represents stock option activity for the three and nine months ended September 30, 2023:
|  | Three Months Ended September 30, 2023 |  | Nine Months Ended September 30, 2023 |  |  |  |
($ in thousands, except per share data) |  | Number of Shares |  | Weighted-Average Exercise Price Per Share |  | Number of Shares |  | Weighted-Average Exercise Price Per Share |  | Weighted-Average Remaining Contract Term |  | Aggregate Intrinsic Value
Outstanding at beginning of period |  | 14,904 |  |  | $ | 13.05 |  |  | 14,904 |  |  | $ | 13.05 |  |  |  |  |
Exercised |  | (1,836) |  |  | $ | 10.90 |  |  | (1,836) |  |  | $ | 10.90 |  |  |  |  |
Outstanding at end of period |  | 13,068 |  |  | $ | 13.35 |  |  | 13,068 |  |  | $ | 13.35 |  |  | 1.6 years |  | $ | 3 |
Exercisable at end of period |  | 13,068 |  |  | $ | 13.35 |  |  | 13,068 |  |  | $ | 13.35 |  |  | 1.6 years |  | $ | 3 |

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