Cash and stock-based compensation plans

12 Months Ended

Dec. 31, 2014

Disclosure Of Compensation Related Costs, Share-Based Payments [Abstract]

Disclosure Of Compensation Related Costs Share Based Payments [Text Block]

17.

Cash and stock-based compensation plans

The Bank have established equity compensation plans under which it manages restricted stock, restricted stock units and stock purchase option plans to attract, retain and motivate Directors and top employees and compensate them for their contributions to the growth and profitability of the Bank. Vesting conditions for each of the Bank’s plans are only comprised of specified requisite service periods.

A. 2008 Stock Incentive Plan – Directors and Executives

In February 2008, the Board of Directors of the Bank approved an incentive plan for Directors and Executives allowing the Bank to grant restricted stock, restricted stock units, stock purchase options, and/or other similar compensation instruments. The maximum aggregate number of shares which may be granted under this plan is three million “Class E” common shares. The 2008 Stock Incentive Plan is administered by the Board of Directors which has the authority in its discretion to select the Directors and Executives to whom the Award may be granted; to determine whether and to what extent awards are granted, and to amend the terms of any outstanding award under this plan.

Restricted stocks are issued at the grant date, but are withheld by the Bank until the vesting date. Restricted stocks are entitled to receive dividends. A restricted stock unit is a grant valued in terms of the Bank’s stock, but no stock is issued at the grant date. Restricted stock units are not entitled to dividends. The Bank issues and delivers common stock at the vesting date of the restricted stock units.

During 2014, 2013 and 2012, the Board of Directors approved the grant of restricted stock to Directors and stock options and restricted stock units to certain Executives of the Bank, as follows:

Restricted stock – Directors

In the years 2014, 2013 and 2012, the Board of Directors granted 28,500, 28,500 and 32,317 “Class E” common shares. The fair value of restricted stock granted was based on the stock closing price in the New York Stock Exchange of the “Class E” shares on July 15, 2014, July 16, 2013, October 16, 2012, and July 17, 2012. The fair value of restricted stock granted totalled $862 thousand in 2014, $713 thousand in 2013 and $714 thousand in 2012, of which $846 thousand, $637 thousand and $428 thousand were charged against income during 2014, 2013 and 2012, respectively. The remaining cost pending amortization of $1,417 thousand at December 31, 2014 will be amortized over 2.02 years.

Restricted stock vest on the grant’s date anniversary, as follows:

Year of Grant
2014		35% in the first and second year, and 30% in the third year
2013		35% in the first and second year, and 30% in the third year
2012		25% each year

A summary of the restricted stock granted to Directors is presented below:

			Weighted average
			grant date fair
	Shares		value
Outstanding at January 1, 2012		82,005	$	14.59
Granted		32,317		22.09
Vested		(23,493)		14.35
Outstanding at December 31, 2012		90,829		17.32
Granted		28,500		25.00
Vested		(34,467)		16.84
Outstanding at December 31, 2013		84,862		20.10
Granted		28,500		30.25
Vested		(35,026)		18.80
Outstanding at December 31, 2014		78,336	$	24.37
Expected to vest		78,336	$	24.37

The fair value of vested stock during the years 2014, 2013 and 2012 was $659 thousand, $581 thousand and $337 thousand, respectively.

Restricted Stock Units and Stock Purchase Options granted to certain Executives

The Board of Directors approved the grant of stock purchase options and restricted stock units to certain Executives of the Bank with a grant date fair value of $1.6 million in 2014, $2.1 million in 2013 and $3.7 million in 2012. In 2014, the distribution of the fair value in restricted stock units and stock purchase options was $0.9 million and $0.7 million, respectively. The 2013 grant was in restricted stock units only.

In 2012, the distribution of the fair value in restricted stock units and stock purchase options was $3.2 million and $0.5 million, respectively. The Bank grants one “Class E” share per each exercised option or vested restricted stock unit.

Restricted stock units:

The fair value of the stock units was based on the “Class E” stock closing price in the New York Stock Exchange on the grants date. These stock units vest 25% each year on the grant date’s anniversary.

Compensation costs of the restricted stock units are amortized during the period of restriction. Costs charged against income during 2014, 2013 and 2012 due to the amortization of these grants totaled $1,158 thousand, $2,077 thousand and $1,317 thousand, respectively. The remaining compensation cost pending amortization of $1,966 thousand in 2014 will be amortized over 2.16 years.

A summary of the status of the restricted stock units granted to certain Executives is presented below:

					Weighted
			Weighted		average
			average grant		remaining	Aggregate
			date fair		contractual	intrinsic value
	Stock units		value		term	(thousands)
Outstanding at January 1, 2012		226,410	$	12.80
Granted		181,598		17.52
Forfeited		(54,367)		13.88
Vested		(85,249)		12.31
Outstanding at December 31, 2012		268,392		15.93
Granted		114,070		18.76
Forfeited		(15,223)		16.81
Vested		(124,490)		16.08
Outstanding at December 31, 2013		242,749		17.13
Granted		47,737		19.24
Forfeited		(39,255)		17.25
Vested		(87,519)		16.27		$	813
Outstanding at December 31, 2014		163,712	$	18.18	2.04 years	$	1,952
Expected to vest		163,712	$	18.18		$	1,952

The fair value of vested stock during the years 2014, 2013 and 2012 was $1,424 thousand, $2,002 thousand and $1,050 thousand, respectively.

Stock purchase options:

The fair value of stock purchase options granted to certain Executives during 2014 and 2012 was estimated using a binomial option-pricing model, based on the following factors:

	Measuring
	unit		2014		2013		2012
Weighted average fair value per option		$		2.16		-		3.01
Weighted average expected term, in years		years		5.50		-		5.50
Expected volatility		%		22.74		-		33.35
Risk-free rate		%		0.12 to 2.19		-		0.18 to 1.34
Expected dividend		%		5.00		-		5.30

These options expire seven years after the grant date and are exercisable at a rate of 25% each year on the grant date’s anniversary.

Related cost charged against income during 2014, 2013 and 2012 as a result of the amortization of these plans amounted to $242 thousand, $282 thousand and $485 thousand, respectively. The remaining compensation cost pending amortization of $601 thousand in 2014 will be amortized over a period of 3.12 years.

A summary of stock options granted is presented below:

					Weighted
					average	Aggregate
			Weighted		remaining	intrinsic
			average		contractual	value
	Options		exercise price		term	(thousands)
Outstanding at January 1, 2012		915,566	$	12.87
Granted		182,420		18.93
Forfeited		(231,639)		15.82
Exercised		(442,675)		12.90
Outstanding at December 31, 2012		423,672		13.83
Granted		-		-
Forfeited		(9,780)		18.18
Exercised		(226,147)		12.76
Outstanding at December 31, 2013		187,745		14.90
Granted		315,971		25.15
Forfeited		(671)		18.57
Exercised		(111,349)		13.18
Outstanding at December 31, 2014		391,696	$	23.65	5.62 years	$	2,526
Exercisable		33,803	$	15.53	2.11 years	$	493
Expected to vest		357,893	$	24.42	5.88 years	$	2,033

The intrinsic value of exercised options during the years 2014, 2013 and 2012 was $1,911 thousand, $2,673 thousand and $3,375 thousand, respectively. During the years 2014, 2013 and 2012 the Bank received $1,470 thousand, $2,886 thousand and $5,709 thousand, respectively, from exercised options.

B. Restricted Stock – Directors (Discontinued)

During 2003, the Board of Directors approved a restricted stock award plan for Directors of the Bank that was amended in 2007 and subsequently terminated in 2008. No grants were made after the 2007’s grant. The restricted stock vested at a rate of 20% each year on the grant date’s anniversary.

Related costs charged against income related to these grants amounted to $41 thousand in 2012. Since December 31, 2012, the Bank has neither unrecognized compensation costs nor restricted stock related to this plan.

A summary of restricted stock granted to Directors is presented below:

			Weighted average
			grant date fair
	Shares		value

Non vested at January 1, 2012		3,518	$	21.35
Granted		-		-
Vested		(3,518)		21.35
Non vested at December 31, 2012		-

The total fair value of vested stock during the year ended December 31, 2012 was $75 thousand.

C. Stock Option Plan 2006 – Directors and Executives (Discontinued)

The 2006 Stock Option Plan was terminated in 2008. The options granted under this plan had an expiration term of seven years after the grant date. No grants were made after the 2007’s grant. There were no compensation costs pending amortization or outstanding options related to this plan.

Since December 31, 2011, there are neither compensation costs pending to be amortized, nor outstanding options related to this plan.

A summary of the share options granted to Directors and certain Executives is presented below:

Weighted

average

Aggregate

average

remaining

intrinsic

exercise

contractual

value

Options

price

term

(thousands)

Outstanding at January 1, 2013

49,804

16.34

Forfeited

Exercised

(49,804)

16.34

Outstanding at December 31, 2013

The intrinsic value of exercised options during the year ended December 31, 2013 and 2012 was $442 thousand and $570 thousand, respectively. During the year ended December 31, 2013 and 2012, the Bank received $814 thousand and $2,130 thousand from exercised options, respectively.

D. Indexed Stock Option Plan (Discontinued)

During 2004, the Board of Directors approved an indexed stock purchase option plan for Directors and certain executives of the Bank, which was subsequently terminated in 2006. The indexed stock options had an expiration term of ten years after the grant date. The exercise price is adjusted based on the change in a customized Latin American general market index. There is no compensation cost pending amortization, or outstanding options related to this plan.

A summary of the indexed stock purchase options is presented below:

Weighted

Average

Aggregate

average

remaining

intrinsic

exercise

contractual

value

Options

price

term

(thousands)

Outstanding at January 1, 2012

325,936

12.86

Forfeited

Expired

(3,542)

14.48

Exercised

(322,394)

16.41

Outstanding at December 31, 2012

The intrinsic value of options exercised during the year ended December 31, 2012 was $1,213 thousand. During the year ended December 31, 2012, the Bank received $5,292 thousand, from exercised options.

E. Deferred Compensation Plan (the “DC Plan”)

In 1999, the Board of Directors approved the DC Plan, which was subsequently terminated in 2003. The Bank could grant a number of deferred equity units (“DEU”). Eligible employees would vest the DEU after three years of service, and distributions were made on the later of (i) the date the vested DEU were credited to the employee’s account, and (ii) ten years the employee was first credited with DEU. Participating employees received dividends with respect to their unvested deferred equity units. A summary on changes is presented below:

	2013		2012
Outstanding at beginning of year		534		1,812
Exercised		(534)		(1,278)
Outstanding at end of year		-		534

Related cost charged against income related to this plan amounted to $1 thousand in 2012. There is no compensation cost related to this plan in 2013.

F. Other plans - Expatriate Top Executives Plan

The Bank sponsors a defined contribution plan for its expatriate top executives based in Panama, which are not eligible to participate in the Panamanian social security system. The Bank’s contributions are determined as a percentage of the annual salaries of top executives eligible for the plan, each contributing an additional amount withheld from their salary. Contributions to this plan are managed by a fund manager through a trust. The executives are entitled to the Bank’s contributions after completing at least three years of service in the Bank. During the years 2014, 2013 and 2012, the Bank charged to salaries expense $133 thousand, $120 thousand and $131 thousand, respectively, that correspond to the Bank’s contributions to this plan. As of December 31, 2014 and 2013, the accumulated liability payable amounted to $222 thousand and $176 thousand, respectively.

- Definition

The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details.

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