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Stock Based Compensation | 12 Months Ended
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Dec. 31, 2022
Share-Based Payment Arrangement [Abstract] |
Stock Based Compensation | STOCK BASED COMPENSATION Stock based compensation expense that has been charged against income was $21,176,000, $20,315,000 and $4,618,000 for the years ended December 31, 2022, 2021, and 2020, respectively. 2014 Omnibus Incentive Plan The Company’s 2014 Omnibus Incentive Plan (“Omnibus Incentive Plan”) provides for the grant of nonqualified and incentive stock options, stock appreciation rights, restricted stock awards, restricted stock units, and other awards that may be settled in, or based upon the value of, the Company’s common stock. The aggregate number of shares of common stock available for issuance under the Omnibus Incentive Plan is 2,450,000 shares. Restricted Stock Awards A summary of changes in the Company’s nonvested Restricted Stock Awards (“RSAs”) under the Omnibus Incentive Plan for the year ended December 31, 2022 were as follows:
Nonvested RSAs |  | Shares |  | Weighted Average Grant Date Fair Value
Nonvested at January 1, 2022 |  | 363,404 |  |  | $ | 67.56 |
Granted |  | 12,471 |  |  | 74.42 |
Vested |  | (126,203) |  |  | 61.74 |
Forfeited |  | (19,186) |  |  | 76.93 |
Nonvested at December 31, 2022 |  | 230,486 |  |  | $ | 70.34 |
RSAs granted to employees under the Omnibus Incentive Plan generally vest immediately or over four years, but vesting periods may vary. The fair value of shares vested during the years ended December 31, 2022, 2021, and 2020, totaled $8,918,000, $6,604,000, and $1,988,000, respectively. Compensation expense for RSAs will be recognized on an accelerated basis over the vesting period of the awards based on the fair value of the stock at the issue date. As of December 31, 2022, there was $5,580,000 of total unrecognized compensation cost related to nonvested RSAs. The cost is expected to be recognized over a remaining weighted average period of 2.27 years. Restricted Stock Units A summary of changes in the Company’s nonvested Restricted Stock Units (“RSUs”) under the Omnibus Incentive Plan for the year ended December 31, 2022 were as follows:
Nonvested RSUs |  | Shares |  | Weighted Average Grant Date Fair Value
Nonvested at January 1, 2022 |  | 122,470 |  |  | $ | 52.07 |
Granted |  | 91,849 |  |  | 69.44 |
Vested |  | — |  |  | — |
Forfeited |  | (3,019) |  |  | 64.00 |
Nonvested at December 31, 2022 |  | 211,300 |  |  | $ | 59.45 |
RSUs granted to employees under the Omnibus Incentive Plan typically vest after four to five years. Compensation expense for the RSUs will be recognized over the vesting period of the awards based on the fair value of the stock at the issue date. As of December 31, 2022, there was $6,355,000 of unrecognized compensation cost related to the nonvested RSUs. The cost is expected to be recognized over a remaining period of 3.00 years. Market Based Performance Stock Units A summary of changes in the Company’s nonvested Market Based Performance Stock Units (“Market Based PSUs”) under the Omnibus Incentive Plan for the year ended December 31, 2022 were as follows:
Nonvested Market Based PSUs |  | Shares |  | Weighted Average Grant Date Fair Value
Nonvested at January 1, 2022 |  | 94,984 |  |  | $ | 43.68 |
Granted |  | 33,276 |  |  | 84.22 |
Incremental shares earned |  | 8,997 |  |  | N/A
Vested |  | (20,996) |  |  | 33.91 |
Forfeited |  | (3,775) |  |  | 77.75 |
Nonvested at December 31, 2022 |  | 112,486 |  |  | $ | 55.57 |
Market Based PSUs granted to employees under the Omnibus Incentive Plan vest after three to five years. The number of shares issued upon vesting will range from 0% to 175% of the shares granted based on the Company’s relative total shareholder return (“TSR”) as compared to the TSR of a specified group of peer banks. Compensation expense for the Market Based PSUs will be recognized over the vesting period of the awards based on the fair value of the award at the grant date. The fair value of Market Based PSUs granted is estimated using a Monte Carlo simulation. The fair value of the Market Based PSUs granted was determined using the following weighted average assumptions:
| Year Ended December 31,
| 2022 |  | 2021 |  | 2020
Grant date | May 1, 2022 |  | May 1, 2021 |  | May 1, 2020
Performance period | 3.00 years |  | 3.00 years |  | 3.00 years
Stock price | $ | 69.44 |  |  | $ | 88.63 |  |  | $ | 26.25 |
Stock price volatility | 55.17 | % |  | 51.71 | % |  | 43.02 | %
Risk-free rate | 2.84 | % |  | 0.35 | % |  | 0.25 | %
Expected volatilities were determined based on the historical volatilities of the Company and the specified peer group. The risk-free interest rate for the performance period was derived from the Treasury constant maturities yield curve on the valuation date. The fair value of shares vested during the year ended December 31, 2022 totaled $1,458,000. No Market Based PSUs vested during the years ended December 31, 2021 and 2020. As of December 31, 2022, there was $2,661,000 of unrecognized compensation cost related to the nonvested Market Based PSUs. The cost is expected to be recognized over a remaining period of 2.00 years. Performance Based Performance Stock Units A summary of changes in the Company’s nonvested Performance Based Performance Stock Units (“Performance Based PSUs”) under the Omnibus Incentive Plan for the year ended December 31, 2022 were as follows:
Nonvested Performance Based PSUs |  | Shares |  | Weighted Average Grant Date Fair Value
Nonvested at January 1, 2022 |  | 259,383 |  |  | $ | 39.32 |
Granted |  | 3,000 |  |  | 69.44 |
Vested |  | — |  |  | — |
Forfeited |  | (6,645) |  |  | 43.03 |
Nonvested at December 31, 2022 |  | 255,738 |  |  | $ | 39.57 |
Performance Based PSUs granted to employees under the Omnibus Incentive Plan vest within 30 days after the conclusion of a three year performance period. Under the terms of the agreement, the number of shares issued upon vesting will range from 0% to 200% of the shares granted based on the Company’s cumulative diluted earnings per share over the performance period. Compensation expense for the Performance Based PSUs is estimated each period based on the fair value of the stock at the grant date and the most probable outcome of the performance condition, adjusted for the passage of time within the vesting period of the awards. The performance period for the outstanding Performance Based PSUs ended on December 31, 2022. The number of shares to be issued upon vesting for these awards is 363,150 shares, or 142% of the target shares granted. During the years ended December 31, 2022 and 2021, the Company recognized $6,966,000 and $7,405,000, respectively, of stock based compensation expense related to Performance based PSUs. As of December 31, 2022, there was no unrecognized compensation cost related to the nonvested Performance Based PSUs. Stock Options A summary of changes in the Company’s stock options under the Omnibus Incentive Plan for the year ended December 31, 2022 were as follows:
Stock Options |  | Shares |  | Weighted Average Exercise Price |  | Weighted Average Remaining Contractual Term (In Years) |  | Aggregate Intrinsic Value (In Thousands)
Outstanding at January 1, 2022 |  | 166,755 |  |  | $ | 33.34 |  |  |  |  |
Granted |  | 35,939 |  |  | 69.44 |  |  |  |  |
Exercised |  | (3,797) |  |  | 26.12 |  |  |  |  |
Forfeited |  | (3,499) |  |  | 69.44 |  |  |  |  |
Expired |  | — |  |  | — |  |  |  |  |
Outstanding at December 31, 2022 |  | 195,398 |  |  | $ | 39.48 |  |  | 6.10 |  | $ | 3,176 |
Fully vested shares and shares expected to vest at December 31, 2022 |  | 195,398 |  |  | $ | 39.48 |  |  | 6.10 |  | $ | 3,176 |
Shares exercisable at December 31, 2022 |  | 128,958 |  |  | $ | 29.10 |  |  | 4.90 |  | $ | 2,717 |
Information related to the stock options for the years ended December 31, 2022, 2021, and 2020 was as follows:
| Year Ended December 31,
(Dollars in thousands, except per share amounts) | 2022 |  | 2021 |  | 2020
Aggregate intrinsic value of options exercised | $ | 280 |  |  | $ | 5,304 |  |  | $ | 940 |
Cash received from option exercises, net | $ | (74) |  |  | $ | 577 |  |  | $ | (227) |
Tax benefit realized from option exercises | $ | 59 |  |  | $ | 1,114 |  |  | $ | 197 |
Weighted average fair value of options granted (per share) | $ | 32.15 |  |  | $ | 35.37 |  |  | $ | 8.85 |
Fair value of vested awards | $ | 423 |  |  | $ | 381 |  |  | $ | 471 |
Stock options awarded to employees under the Omnibus Incentive Plan are generally granted with an exercise price equal to the market price of the Company’s common stock at the date of grant, vest over four years, and have ten years contractual terms. The fair value of stock options granted is estimated at the date of grant using the Black-Scholes option-pricing model. The fair value of the stock options granted was determined using the following weighted average assumptions:
| 2022 |  | 2021 |  | 2020
Risk-free interest rate | 2.77 | % |  | 1.16 | % |  | 0.46 | %
Expected term | 6.25 years |  | 6.25 years |  | 6.25 years
Expected stock price volatility | 43.33 | % |  | 39.26 | % |  | 33.83 | %
Dividend yield | — |  |  | — |  |  | — |
Beginning in 2022, expected volatilities are determined based on the Company’s historical volatility. Prior to 2022, expected volatilities were determined based on a blend of the Company’s historical volatility and historical volatilities of a peer group of companies with a similar size, industry, stage of life cycle, and capital structure. The expected term of the options granted was determined based on the SEC simplified method, which calculates the expected term as the mid-point between the weighted average time to vesting and the contractual term. The risk-free interest rate for the expected term of the options was derived from the Treasury constant maturity yield curve on the valuation date. As of December 31, 2022, there was $790,000 of unrecognized compensation cost related to nonvested stock options. The cost is expected to be recognized over a remaining weighted average period of 3.06 years. Employee Stock Purchase PlanDuring the year ended December 31, 2019, the Company’s Board of Directors adopted, and the Company’s stockholders approved, the Company's 2019 Employee Stock Purchase Plan (“ESPP”). Under the ESPP, 2,500,000 shares of common stock were reserved for issuance. The ESPP enables eligible employees to purchase the Company’s common stock at a price per share equal to 85% of the lower of the fair market value of the common stock at the beginning or end of each six month offering period. The first offering period commenced on February 1, 2021, and during the years ended December 31, 2022 and 2021, 24,516 and 9,101 shares were issued under the plan, respectively.

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