Annual report pursuant to Section 13 and 15(d)

EMPLOYEE BENEFITS AND STOCK BASED COMPENSATION (Tables)

v3.10.0.1
EMPLOYEE BENEFITS AND STOCK BASED COMPENSATION (Tables)
 12 Months Ended
Dec. 31, 2018
Employee Benefits and Share-based Compensation, Noncash [Abstract]  
Payment Made for Employee Benefit Plans
The following 401(k) Plan match and other discretionary contributions were made to the Company’s employees, in accordance with the plans described above, in 2018, 2017, and 2016 (dollars in thousands):
 
 
2018
 
2017
 
2016
401(k) Plan
$
4,592

 
$
3,505

 
$
3,263

ESOP
1,005

 
1,255

 
1,425

Cash
1,509

 
1,461

 
1,496

Total
$
7,106

 
$
6,221

 
$
6,184

Schedule of Recognized Stock-Based Compensation Expense
For the years ended December 31, 2018, 2017, and 2016, the Company recognized stock-based compensation expense (included in salaries and benefits expense) (dollars in thousands, except per share data) as follows:
 
Year Ended December 31,
 
2018
 
2017
 
2016
Stock-based compensation expense
$
6,132

 
$
4,648

 
$
3,270

Reduction of income tax expense
1,287

 
1,467

 
1,104

Per share compensation cost
$
0.07

 
$
0.06

 
$
0.05

Summary of Stock Option Activity
The following table summarizes the stock option activity during the year ended December 31, 2018:
 
Stock Options
(shares)
 
Weighted
Average
Exercise Price
 
Weighted
Average
Remaining
Contractual
Life
 
Aggregate
Intrinsic Value
Outstanding as of December 31, 2017
121,743

 
$
13.93

 
 
 
 

Granted
—

 
—

 
 
 
 

Exercised
(72,743
)
 
13.51

 
 
 
 

Forfeited
—

 
—

 
 
 
 

Expired
(1,415
)
 
18.10

 
 
 
 
Outstanding as of December 31, 2018
47,585

 
14.44

 
2.54
 
$
656,238

Exercisable as of December 31, 2018
47,585

 
14.44

 
2.54
 
656,238

Summary of Nonvested Stock Activity
The following table summarizes the restricted stock activity for the year ended December 31, 2018:
 
 
Number of Shares of
RSAs
 
Weighted Average
Grant-Date Fair
Value
Unvested as of December 31, 2017
326,736

 
$
27.68

Granted
212,749

 
37.36

Net settle for taxes
(38,700
)
 
40.23

Vested
(113,023
)
 
29.82

Forfeited
(12,348
)
 
30.57

Unvested as of December 31, 2018
375,414

 
32.41

Summary of Performance Stock Activity
PSUs are granted to certain employees at no cost to the recipient and are subject to vesting based on achieving certain performance metrics; the grant of PSUs is subject to approval by the Company’s Compensation Committee at its sole discretion. PSUs may be paid in cash or shares of common stock or a combination thereof. Holders of PSUs have no right to vote the shares represented by the units. In 2018, the PSUs awarded were market based awards with the number of PSUs ultimately earned based on the Company’s total shareholder return as measured over the performance period.
 
 
Number of Shares of
PSUs
 
Weighted Average Grant-
Date Fair Value
Unvested as of December 31, 2017
134,350

 
$
24.98

Granted
61,310

 
34.28

Net settle for taxes
(16,342
)
 
38.64

Vested
(26,977
)
 
14.32

Forfeited
(2,294
)
 
37.19

Unvested as of December 31, 2018
150,047

 
31.67

Schedule of Share-Based Payment Award, Stock Options, Valuation Assumptions
The fair value of each PSU granted is estimated on the date of grant using the Monte Carlo simulation lattice model that uses the assumptions noted in the following table:
 
 
2018(5)
2017(5)
2016(5)
Dividend yield(1)
2.25
%
2.15
%
3.36
%
Expected life in years(2)
2.86

2.85

2.85

Expected volatility(3)
23.47
%
23.35
%
22.16
%
Risk-free interest rate(4)
2.38
%
1.40
%
0.83
%
 
(1) Calculated as the ratio of the current dividend paid per the stock price on the date of grant.
(2) Represents the remaining performance period as of the grant date
(3) Based on the historical volatility for the period commensurate with the expected life of the PSUs.
(4) Based upon the zero-coupon U.S. Treasury rate commensurate with the expected life of the PSUs on the grant date.
(5) Assumptions disclosed represent those used in the primary annual issuance.
Estimated Unamortized Compensation Expense Recognized in Future
The estimated unamortized compensation expense, net of estimated forfeitures, related to restricted stock and performance stock issued and outstanding as of December 31, 2018 that will be recognized in future periods is as follows (dollars in thousands):
 
 
Restricted Stock
 
Performance
Stock
 
Total
2019
$
4,644

 
$
1,267

 
$
5,911

2020
3,047

 
709

 
3,756

2021
1,291

 
80

 
1,371

2022
227

 
—

 
227

Total
$
9,209

 
$
2,056

 
$
11,265