XML 37 R27.htm IDEA: XBRL DOCUMENT
v3.22.2

Note 19 - Stock-based Compensation | 6 Months Ended
--- | ---
Jun. 30, 2022
Notes to Financial Statements |
Share-Based Payment Arrangement [Text Block] |
(19) | Stock-Based Compensation
The fair value of all stock-based awards granted, net of estimated forfeitures, is recognized as compensation expense over the respective service period. At Bancorp's 2015 Annual Meeting of Shareholders, shareholders approved the 2015 Omnibus Equity Compensation Plan and authorized the shares available from the expiring 2005 plan for future awards under the 2015 plan. In 2018, shareholders approved an additional 500,000 shares for issuance under the plan. As of June 30, 2022, there were 379,000 shares available for future awards. The 2005 Stock Incentive Plan expired in April 2015 and SARs granted under this plan expire as late as 2025. The 2015 Stock Incentive Plan has no defined expiration date. SAR Grants – SARs granted have a vesting schedule of 20% per year and expire ten years after the grant date unless forfeited due to employment termination. Fair values of SARs are estimated at the date of grant using the Black-Scholes option-pricing model, a leading formula for calculating such value. This model requires the input of assumptions, changes to which can materially impact the fair value estimate. The following assumptions were used in SAR valuations at the grant date in each year:
Assumptions |  | 2022 |  |  | 2021 |
Dividend yield |  |  | 2.38 | % |  |  | 2.52 | %
Expected volatility |  |  | 25.42 | % |  |  | 25.21 | %
Risk free interest rate |  |  | 1.98 | % |  |  | 1.23 | %
Expected life (in years) |  |  | 7.1 |  |  |  | 7.1 |
Dividend yield and expected volatility are based on historical information for Bancorp corresponding to the expected life of SARs granted. Expected volatility is the volatility of underlying shares for the expected term calculated on a monthly basis. The risk free interest rate is the implied yield currently available on U.S. Treasury issues with a remaining term equal to the expected life of the awards. The expected life of SARs is based on actual experience of past like-term SARs. Bancorp evaluates historical exercise and post-vesting termination behavior when determining the expected life. RSA Grants – RSAs granted to officers vest over five years. For all grants prior to 2015, grantees are entitled to dividend payments during the vesting period. For grants in 2015 and forward, dividends are deferred until shares are vested. Fair value of RSAs is equal to the market value of the shares on the date of grant. PSU Grants – PSUs vest based upon service and a three-year performance period, which begins January 1 of the first year of the performance period. Because grantees are not entitled to dividend payments during the performance period, the fair value of these PSUs is estimated based upon the market value of the underlying shares on the date of grant, adjusted for non-payment of dividends. Grants require a one-year post-vesting holding period and therefore the fair value of such grants incorporates a liquidity discount related to the holding period of 5.8% and 6.1% for 2022 and 2021. RSU Grants – RSUs are only granted to non-employee directors, are time-based and vest 12 months after grant date. Because grantees are entitled to deferred dividend payments at the end of the vesting period, therefore the fair value of the RSUs equals market value of underlying shares on the date of grant. In the first quarters of 2022 and 2021, Bancorp awarded 5,410 and 7,758 RSUs to non-employee directors of Bancorp with a grant date fair value of $350,000 and $315,000, respectively. Bancorp utilized cash of $233,000 and $164,000 during the first six months of 2022 and 2021, respectively, for the purchase of shares upon the vesting of RSUs. Bancorp has recognized stock-based compensation expense for SARs, RSAs and PSUs within compensation expense and RSUs for directors within other non-interest expense, as follows:
|  | Three months ended June 30, 2022 |
(in thousands) |  | Stock Appreciation Rights |  |  | Restricted Stock Awards |  |  | Restricted Stock Units |  |  | Performance Stock Units |  |  | Total |
Expense |  | $ | 94 |  |  | $ | 350 |  |  | $ | 87 |  |  | $ | 526 |  |  | $ | 1,057 |
Deferred tax benefit |  |  | (19 | ) |  |  | (74 | ) |  |  | (18 | ) |  |  | (111 | ) |  |  | (222 | )
Total net expense |  | $ | 75 |  |  | $ | 276 |  |  | $ | 69 |  |  | $ | 415 |  |  | $ | 835 |
|  | Three months ended June 30, 2021 |
(in thousands) |  | Stock Appreciation Rights |  |  | Restricted Stock Awards |  |  | Restricted Stock Units |  |  | Performance Stock Units |  |  | Total |
Expense |  | $ | 86 |  |  | $ | 337 |  |  | $ | 78 |  |  | $ | 913 |  |  | $ | 1,414 |
Deferred tax benefit |  |  | (18 | ) |  |  | (71 | ) |  |  | (16 | ) |  |  | (192 | ) |  |  | (297 | )
Total net expense |  | $ | 68 |  |  | $ | 266 |  |  | $ | 62 |  |  | $ | 721 |  |  | $ | 1,117 |
|  | Six months ended June 30, 2022 |
(in thousands) |  | Stock Appreciation Rights |  |  | Restricted Stock Awards |  |  | Restricted Stock Units |  |  | Performance Stock Units |  |  | Total |
Expense |  | $ | 187 |  |  | $ | 682 |  |  | $ | 172 |  |  | $ | 1,007 |  |  | $ | 2,048 |
Deferred tax benefit |  |  | (39 | ) |  |  | (144 | ) |  |  | (36 | ) |  |  | (212 | ) |  |  | (431 | )
Total net expense |  | $ | 148 |  |  | $ | 538 |  |  | $ | 136 |  |  | $ | 795 |  |  | $ | 1,617 |
|  | Six months ended June 30, 2021 |
(in thousands) |  | Stock Appreciation Rights |  |  | Restricted Stock Awards |  |  | Restricted Stock Units |  |  | Performance Stock Units |  |  | Total |
Expense |  | $ | 175 |  |  | $ | 666 |  |  | $ | 154 |  |  | $ | 1,268 |  |  | $ | 2,263 |
Deferred tax benefit |  |  | (37 | ) |  |  | (140 | ) |  |  | (32 | ) |  |  | (267 | ) |  |  | (476 | )
Total net expense |  | $ | 138 |  |  | $ | 526 |  |  | $ | 122 |  |  | $ | 1,001 |  |  | $ | 1,787 |
Detail of unrecognized stock-based compensation expense follows:
|  | Stock |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
(in thousands) |  | Appreciation |  |  | Restricted |  |  | Restricted |  |  | Performance |  |  |  |  |
Year ended |  | Rights |  |  | Stock Awards |  |  | Stock Units |  |  | Stock Units |  |  | Total |
Remainder of 2022 |  | $ | 189 |  |  | $ | 715 |  |  | $ | 159 |  |  | $ | 1,054 |  |  | $ | 2,117 |
2023 |  |  | 311 |  |  |  | 1,232 |  |  |  | 2 |  |  |  | 1,303 |  |  |  | 2,848 |
2024 |  |  | 205 |  |  |  | 1,002 |  |  |  | — |  |  |  | 603 |  |  |  | 1,810 |
2025 |  |  | 146 |  |  |  | 763 |  |  |  | — |  |  |  | — |  |  |  | 909 |
2026 |  |  | 88 |  |  |  | 436 |  |  |  | — |  |  |  | — |  |  |  | 524 |
2027 |  |  | 10 |  |  |  | 50 |  |  |  | — |  |  |  | — |  |  |  | 60 |
Total estimated expense |  | $ | 949 |  |  | $ | 4,198 |  |  | $ | 161 |  |  | $ | 2,960 |  |  | $ | 8,268 |
The following table summarizes SARs activity and related information:
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | Weighted |
|  |  |  |  |  |  |  |  |  |  | Weighted |  |  |  |  |  |  | Weighted |  |  | average |
|  |  |  |  |  |  |  |  |  |  | average |  |  | Aggregate |  |  | average |  |  | remaining |
|  |  |  |  |  | Exercise |  |  | exercise |  |  | intrinsic |  |  | fair |  |  | contractual |
(in thousands, except per share data) |  | SARs |  |  | price |  |  | price |  |  | value(1) |  |  | value |  |  | life (in years) |
Outstanding, January 1, 2021 |  |  | 593 |  |  | $15.24 | - | $40.00 |  |  | $ | 27.47 |  |  | $ | 7,706 |  |  | $ | 4.44 |  |  |  | 5.1 |
Granted |  |  | 30 |  |  | 47.17 | - | 50.71 |  |  |  | 50.48 |  |  |  | — |  |  |  | 9.69 |  |  |  |  |
Exercised |  |  | (108 | ) |  | 15.24 | - | 19.37 |  |  |  | 16.40 |  |  |  | 4,239 |  |  |  | 2.85 |  |  |  |  |
Forfeited |  |  | — |  |  |  | — |  |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  |  |
Outstanding, December 31, 2021 |  |  | 515 |  |  | $15.24 | - | $50.71 |  |  | $ | 31.16 |  |  | $ | 16,854 |  |  | $ | 5.08 |  |  |  | 5.1 |
Outstanding, January 1, 2022 |  |  | 515 |  |  | $15.24 | - | $50.71 |  |  | $ | 31.16 |  |  | $ | 16,854 |  |  | $ | 5.08 |  |  |  | 5.1 |
Granted |  |  | 33 |  |  | 53.29 | - | 54.91 |  |  |  | 54.86 |  |  |  | — |  |  |  | 11.82 |  |  |  |  |
Exercised |  |  | (61 | ) |  | 15.24 | - | 36.65 |  |  |  | 16.69 |  |  |  | 2,544 |  |  |  | 2.78 |  |  |  |  |
Forfeited |  |  | — |  |  |  | — |  |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  |  |
Outstanding, June 30, 2022 |  |  | 487 |  |  | $15.24 | - | $54.91 |  |  | $ | 34.58 |  |  | $ | 12,294 |  |  | $ | 5.83 |  |  |  | 5.4 |
Vested and exercisable |  |  | 349 |  |  | $15.24 | - | $50.71 |  |  | $ | 30.84 |  |  | $ | 10,121 |  |  | $ | 4.97 |  |  |  | 4.4 |
Unvested |  |  | 138 |  |  | 35.90 | - | 54.91 |  |  |  | 44.06 |  |  |  | 2,173 |  |  |  | 8.08 |  |  |  | 3.3 |
Outstanding, June 30, 2022 |  |  | 487 |  |  | $15.24 | - | $54.91 |  |  | $ | 34.58 |  |  | $ | 12,294 |  |  | $ | 5.83 |  |  |  | 5.4 |
Vested in the current year |  |  | 43 |  |  | $35.90 | - | $50.71 |  |  | $ | 39.29 |  |  | $ | 881 |  |  | $ | 6.71 |  |  |  |  |
(1) – Aggregate intrinsic value for SARs is defined as the amount by which the current market price of the underlying stock exceeds the exercise or grant price. The following table summarizes activity for RSAs granted:
|  |  |  |  |  | Grant date |
|  |  |  |  |  | weighted |
(in thousands, except per share data) |  | RSAs |  |  | average cost |
Unvested at January 1, 2021 |  |  | 99 |  |  | $ | 36.85 |
Shares awarded |  |  | 39 |  |  |  | 46.90 |
Restrictions lapsed and shares released |  |  | (34 | ) |  |  | 35.48 |
Shares forfeited |  |  | (5 | ) |  |  | 40.81 |
Unvested at December 31, 2021 |  |  | 99 |  |  | $ | 41.07 |
Unvested at January 1, 2022 |  |  | 99 |  |  | $ | 41.07 |
Shares awarded |  |  | 36 |  |  |  | 58.47 |
Restrictions lapsed and shares released |  |  | (31 | ) |  |  | 40.38 |
Shares forfeited |  |  | (3 | ) |  |  | 45.15 |
Unvested at June 30, 2022 |  |  | 101 |  |  | $ | 47.25 |
Shares expected to be awarded for PSUs granted to executive officers of Bancorp, the three-year performance period for which began January 1 of the award year, are as follows:
|  | Vesting |  |  |  |  |  |  | Expected |
Grant |  | period |  |  | Fair |  |  | shares to |
year |  | in years |  |  | value |  |  | be awarded |
2020 |  |  | 3 |  |  | $ | 32.27 |  |  |  | 65,111 |
2021 |  |  | 3 |  |  |  | 44.44 |  |  |  | 47,280 |
2022 |  |  | 3 |  |  |  | 48.48 |  |  |  | 36,350 |

X
- Definition The entire disclosure for share-based payment arrangement. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 2 -Subparagraph (a) -URI https://asc.fasb.org/extlink&oid=128089324&loc=d3e5070-113901 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -URI https://asc.fasb.org/topic&trid=2228938 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 2 -Subparagraph (l) -URI https://asc.fasb.org/extlink&oid=128089324&loc=d3e5070-113901 Reference 4: http://www.xbrl.org/2003/role/exampleRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 2 -Subparagraph (a)(1) -URI https://asc.fasb.org/extlink&oid=128089324&loc=d3e5070-113901 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 2 -Subparagraph (h)(2)(i) -URI https://asc.fasb.org/extlink&oid=128089324&loc=d3e5070-113901 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 2 -Subparagraph (h)(2) -URI https://asc.fasb.org/extlink&oid=128089324&loc=d3e5070-113901 + Details
Name: | us-gaap_DisclosureOfCompensationRelatedCostsShareBasedPaymentsTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- References No definition available. + Details
Name: | us-gaap_DisclosureTextBlockAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration