9.	Shared-based Compensation

Stock Options:

The Company has issued non-qualified and incentive stock options to employees and nonemployee directors. The fair value of these options are estimated on the date of grant using the Black-Scholes option pricing model, which requires estimates of the expected term of the option, the expected volatility of the price of the Company’s common stock, dividend yield and the risk-free interest rate. Options outstanding as of March 31, 2016 generally vest over a period of three years with an expiration term of ten years. The exercise price of these options ranges from $24.26 to $31.55. The expected volatility is based on the historical volatility of the Company’s common stock over the period of time equivalent to the expected term for each award. Due to the Company’s lack of option exercise history, the expected term is calculated using the simplified method defined as the midpoint between the vesting period and the contractual term of each award. The risk free interest rate is based on the U.S. Treasury yield curve in effect on the date of grant which most closely corresponds to the expected term of the option. The Company declared its first dividend in December 2015; and therefore, a dividend yield was not utilized in the Black-Scholes calculation for options granted prior to December 2015. The weighted average input assumptions used and resulting fair values were as follows:

	2016
Expected life (in years)		6
Risk-free interest rate		1.11	%
Expected volatility		40.27	%
Dividend yield		3.56	%

The following table summarizes the stock option activity:

							Aggregate
					Weighted-Average Remaining		Intrinsic
	Shares		Weighted-Average Exercise Price		Contractual Life (Yrs)		Value
Outstanding at December 31, 2015		98	$	28.17
Granted		50		27.99
Exercised		(1)		26.52
Forfeited		(6)		29.87
Outstanding at March 31, 2016		141	$	28.05		8.21	$	343
Exerciseable at March 31, 2016		61	$	27.20		6.50	$	198

The weighted-average grant date fair value of options granted was $7.47. The unrecognized compensation expense calculated under the fair value method for shares expected to vest as of March 31, 2016 was approximately $0.8 million and is expected to be recognized over a weighted average period of 2.2 years. The Company received $26 thousand in cash proceeds from the exercise of stock options during the three months ended March 31, 2016. No options were exercised during the three months ended March 31, 2015.

Restricted Stock:

The Company has issued restricted stock to employees and nonemployee directors generally with vesting terms up to five years after the date of issuance. The fair value is equal to the market price of the Company’s common stock on the date of grant. Expense for restricted stock is amortized ratably over the vesting period. The following table summarizes the restricted stock activity:


	Shares		Weighted-Average Grant Date Fair Value
Unvested at December 31, 2015		264	$	26.38
Granted		15		27.68
Vested		(62)		25.19
Forfeited		(1)		26.85
Unvested at March 31, 2016		216	$	26.82

The unvested shares above include 3,333 shares that were accelerated and 37,918 shares that were forfeited on April 8, 2016 in connection with the resignation of a key executive.

The total costs of the options and restricted awards charged against income during the three months ended March 31, 2016 and 2015 was $524 thousand and $529 thousand, respectively. The Company accrued an additional $228 thousand and $349 thousand for performance -based restricted stock awards for the three months ended March 31, 2016 and 2015, respectively. The cost of the 2016 performance awards will depend on management’s achievement of pre-determined performance targets and the Company’s fiscal 2016 performance and will be finalized and approved at the first Board of Directors meeting in 2017. The cost recognized during the quarter is based on the performance that management expects the Company will achieve as of March 31, 2016. The total income tax benefit recognized in the consolidated statements of income for these restricted stock awards was approximately $171 thousand and $210 thousand for the three months ended March 31, 2016 and 2015, respectively. The total tax benefit recognized in additional paid-in capital upon vesting of restricted stock awards and exercise of stock options for the three months ended March 31, 2016 and 2015 was $96 thousand and $165 thousand respectively. There was approximately $3.6 million of total unrecognized compensation cost related to restricted stock awards as of March 31, 2016. The cost is expected to be recognized over a weighted-average period of approximately 1.9 years.