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STOCK BASED COMPENSATION | 12 Months Ended
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Dec. 31, 2020
STOCK BASED COMPENSATION |
STOCK BASED COMPENSATION | NOTE 15 – STOCK BASED COMPENSATION Effective April 8, 2008, the Company adopted the Lakeland Financial Corporation 2008 Equity Incentive Plan (the “2008 Plan”), which was approved by the Company’s stockholders. At its inception there were 1,125,000 shares of common stock reserved for grants of stock options, stock appreciation rights, stock awards and cash incentive awards to employees of the Company, its subsidiaries and Board. Effective April 9, 2013, the Company adopted the Lakeland Financial Corporation 2013 Equity Incentive Plan (the “2013 Plan”), which was also approved by the Company’s stockholders. At its inception the remaining shares of common stock available to grant under the 2008 Plan of 435,867 were transferred to the 2013 Plan and reserved for grants of stock options, stock appreciation rights, stock awards and cash incentive awards to employees of the Company, its subsidiaries and Board. Non-vested shares from the 2008 Plan that were unused at vesting were added to the shares available to grant of the 2013 Plan. Effective April 12, 2017, the Company adopted the Lakeland Financial Corporation 2017 Equity Incentive Plan (the “2017 Plan”), which was also approved by the Company’s stockholders and does not permit share recycling. At its inception there were 1,000,000 shares of common stock reserved for grants of stock options, stock appreciation rights, stock awards and cash incentive awards to employees of the Company, its subsidiaries and Board. As of December 31, 2020, 590,460 shares were available for future grants in the 2017 Plan, which is the only active plan. Certain stock awards provide for accelerated vesting if there is a change in control. The Company has a policy of issuing new shares to satisfy exercises of stock awards. Included in net income for the years ended December 31, 2020, 2019 and 2018 was employee stock compensation expense of $1.8 million, $4.2 million and $5.6 million, and a related tax benefit of $461,000, $1.1 million and $1.5 million, respectively. Stock Options The equity incentive plan requires that the exercise price for options be the market price on the date the options are granted. The maximum option term is ten years and the awards usually vest over three years. The fair value of each stock option is estimated with the Black Scholes pricing model, using the following weighted-average assumptions as of the grant date for stock options granted during the years presented. Expected volatilities are based on historical volatility of the Company’s stock over the immediately preceding expected life period, as well as other factors known on the grant date that would have a significant effect on the stock price during the expected life period. The expected stock option life used is the historical option life of the similar employee base or Board. The turnover rate is based on historical data of the similar employee base as a group and the Board as a group. The risk-free interest rate is the Treasury rate on the date of grant corresponding to the expected life period of the stock option. There were no stock option grants in 2020, 2019 or 2018. Also, there were no modifications of stock option awards during the years ended December 31, 2020, 2019 and 2018. As of December 31, 2020, there was no unrecognized compensation cost related to non-vested stock options granted under the plan. ​ NOTE 15 – STOCK BASED COMPENSATION (continued) All outstanding stock options were exercised during the year ended December 31, 2018. The following table presents information on stock awards exercised for the years ended December 31, 2020, 2019, and 2018. ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
(dollars in thousands) |  | 2020 |  | 2019 |  | 2018
Total intrinsic value | ​ | $ | — | ​ | $ | — | ​ | $ | 243
Cash received | ​ |  | — | ​ |  | — | ​ |  | 118
Actual tax benefit realized for tax deductions | ​ |  | — | ​ |  | — | ​ |  | —
​ Restricted Stock Awards and Units The fair value of restricted stock awards and units is the closing price of the Company’s common stock on the date of grant adjusted for the present value of expected dividends. The restricted stock awards fully vest after one year or more of service, determined at the grant date, with the exception of 15,600 shares granted to non-employee directors of the Board included as vested, below, which vested on the grant date. A summary of the changes in the Company’s non-vested shares for the year follows: ​
​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | Weighted-Average
​ | ​ | ​ | ​ | Grant-Date
Nonvested Shares |  | Shares |  | Fair Value
Nonvested at January 1, 2020 |  | 3,500 | ​ | $ | 45.70
Granted |  | 17,100 | ​ |  | 46.13
Vested |  | (15,600) | ​ |  | 46.32
Nonvested at December 31, 2020 |  | 5,000 | ​ | $ | 45.22
​ As of December 31, 2020, there was $56,000 of total unrecognized compensation cost related to non-vested shares granted under the plan. The cost is expected to be recognized over a weighted period of 0.98 years. The total fair value of shares vested during the years ended December 31, 2020, 2019 and 2018 was $723,000, $737,000 and $726,000, respectively. Performance Stock Units The fair value of stock awards is the closing price of the Company’s common stock on the date of grant adjusted for the present value of expected dividends. The expected dividend rate is assumed to be the most recent dividend rate declared by the Board on the grant date. The grant date fair value of stock awards is assumed at the target payout rate. The stock awards fully vest on the third anniversary of the grant date. The 2020-2022, 2019-2021 and 2018-2020 Long-Term Incentive Plans must be paid in stock and have performance conditions which include revenue growth, diluted earnings per share growth and average return on beginning equity. Shares granted below include the number of shares assumed granted based on actual performance criteria of the 2020-2022, 2019-2021 and 2018-2020 Long-Term Incentive Plans at December 31, 2020. ​
​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | Weighted-Average
​ | ​ | ​ | ​ | Grant-Date
Nonvested Shares |  | Shares |  | Fair Value
Nonvested at January 1, 2020 |  | 277,085 | ​ | $ | 44.86
Granted, net |  | 7,053 | ​ |  | 44.73
Vested |  | (120,204) | ​ |  | 44.91
Forfeited |  | (6,419) | ​ |  | 43.98
Nonvested at December 31, 2020 |  | 157,515 | ​ | $ | 44.85
​ As of December 31, 2020, there was $2.3 million of total unrecognized compensation cost related to non-vested shares granted under the Plan. The cost is expected to be recognized over a weighted period of 1.86 years. The total fair value of shares vested during the year ended December 31, 2020, 2019 and 2018 was $5.7 million, $5.7 million and $6.6 million, respectively. During the years ended December 31, 2020, 2019 and 2018, 120,204, 126,672 and 137,472 shares vested, respectively. ​

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