In accordance with ASC 718, compensation expense is recognized only for those shares expected to vest, based on the Company's historical experience and future expectations. The following table summarizes the effects of share-based compensation for options and awards granted under the Company's equity incentive plans for each of the periods presented:


	Year Ended December 31,
(Dollars in thousands)	2022		2021		2020
Salaries and employee benefits	$	4,567	$	4,580	$	3,822
Directors stock awards	350		91		165
Income tax benefit	(1,461)		(1,449)		(809)
Net share-based compensation effect	$	3,456	$	3,222	$	3,178

Upon exercise or vesting of a share-based award, if the tax deduction exceeds the compensation cost that was previously recorded for financial statement purposes, this will result in an excess tax benefit. Effective January 1, 2017, ASU 2016-09, "Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting" requires the Company to recognize all excess tax benefits or tax deficiencies through the income statement as income tax expense/benefit. Under previous GAAP, any excess tax benefits were recognized in additional-paid-in-capital to offset current-period and subsequent-period tax deficiencies. The Company recorded income tax benefit of $0.1 million in 2022, income tax benefit of $0.2 million in 2021, and income tax expense of $0.3 million in 2020, as a result of restricted stock units vesting during the year.

The Company has adopted equity incentive plans for the purpose of granting options, restricted stock and other equity based awards for the Company's common stock to directors, officers and other key individuals. Option awards are generally granted with an exercise price equal to the market price of the Company's common stock at the date of grant; those option awards generally vest based on three or five years of continuous service and have 10-year contractual terms. Certain option and share awards provide for accelerated vesting if there is a change in control (as defined in the stock option plans below). The Company has historically issued new shares of common stock upon exercises of stock options and purchases of restricted awards.

In April 2013, the Company adopted and shareholders approved the 2013 Stock Compensation Plan ("2013 Plan") making available 2,200,000 shares for grants to employees and directors. Upon adoption of the 2013 Plan, all unissued shares from the previous plan were frozen and no new grants were granted under the previous plan. Shares may continue to be settled under the previous plan pursuant to previously outstanding awards. New shares are issued from the 2013 Plan.

Valuation and amortization method— The fair value of stock options granted is estimated using the Black-Scholes option pricing formula and a single option award approach. Historical data is used to estimate option exercise and employee termination activity within the valuation model; separate groups of employees that have similar historical exercise behavior are considered separately for valuation purposes. This fair value is then amortized on a straight-line basis over the requisite service periods of the awards, which is generally the vesting period.

Risk-free interest rate —The risk-free interest rate for periods within the contractual life of the option is based on the Treasury yield curve in effect at the time of grant.


	Number of Units	Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value (in thousands)
Stock options outstanding as of January 1, 2022	47,440	$	14.32
Changes during the year:
Granted	—	—
Exercised	(47,440)	14.32			$	706
Expired	—	—
Forfeited	—	—
Stock options outstanding as of December 31, 2022	—	—		0.0	—

Vested and exercisable as of December 31, 2022	—			0.0	—

The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying option awards and the quoted price of the Company's common stock for the options that were in-the-money as of December 31, 2022.

There were 47,440 and 86,373 options exercised during the years ended December 31, 2022 and 2021, respectively. The aggregate intrinsic value of options exercised in 2022 and 2021 under our stock option plan determined as of the date of exercise was $0.7 million and $0.9 million, respectively. There were no options exercised in 2020.

Under the 2013 Plan, the Company awarded restricted stock units ("RSUs") and performance stock units ("PSUs") to non-officer directors and certain senior management personnel. The awards typically vest over a two, three or five year period from the date of grant and are subject to forfeiture until performance and employment targets are achieved. Compensation expense is measured as the market price of the stock awards on the grant date, and is recognized over the specified vesting periods.

As of December 31, 2022, there was $3.5 million of total unrecognized compensation cost related to RSUs and PSUs that is expected to be recognized over a weighted-average period of 1.7 years.


	Number of Units	Weighted Average Grant Date Fair Value		Fair Value of RSUs and PSUs That Vested During The Year (in thousands)
Unvested as of December 31, 2019	366,467	$	28.89

Changes during the year:
Granted	322,180	18.11
Forfeited	(28,058)	23.79
Vested	(128,215)	29.48		$	3,780
Unvested as of December 31, 2020	532,374	22.49

Changes during the year:
Granted	221,774	21.93
Forfeited	(75,850)	21.95
Vested	(192,959)	23.42		5,077
Unvested as of December 31, 2021	485,339	21.95

Changes during the year:
Granted	99,887	28.99
Forfeited	(53,980)	25.66
Vested	(178,781)	21.91		4,787
Unvested as of December 31, 2022	352,465	23.40