Employee Benefit Plans

12 Months Ended

Dec. 31, 2020

Defined Benefit Plan [Abstract]

Employee Benefit Plans

Note 13. Employee Benefit Plans

401(k) Plan:

The Company provides a deferred salary reduction plan (“Plan”) under Section 401(k) of the Internal Revenue Code covering substantially all employees. After 90 days of service the Company matches 100% of employee contributions up to 3% of compensation and 50% of employee contributions on the next 2% of compensation. The Company’s contribution to the Plan was $1.1 million in 2020 and $818 thousand in 2019.

Equity Incentive Plans:

The Compensation Committee of the Company’s Board of Directors may grant or award eligible participants stock options, restricted stock, restricted stock units, stock appreciation rights, and other stock-based awards or any combination of awards (collectively referred to herein as "Rights").  At December 31, 2020, the Company had one active equity incentive plan available for future grants, the 2015 Stock Incentive Plan, which had 26,601 rights issued and 1,876,894 Rights available for future grants or awards.

In addition, the Company has 30,500 Rights issued from the Cornerstone Bancshares, Inc. 2002 Long Term Incentive Plan, 40,250 Rights issued from the Cornerstone Non-Qualified Plan Options, and 2,266 Rights issued from the Capstone Stock Option Plan. These plans do not have any Rights available for future grants or awards.

Stock Options:

A summary of the activity in these stock option plans is presented in the following table:

		Weighted
		Average
		Exercisable
	Number	Price
Outstanding at December 31, 2018	170,625	$	10.61
Granted	—		—
Exercised	(31,931)		11.85
Forfeited	(2,036)		12.20
Outstanding at December 31, 2019	136,658		10.29
Granted	—		—
Exercised	(33,556)		10.12
Forfeited	(3,485)		15.05
Outstanding at December 31, 2020	99,617		10.19

Information pertaining to options outstanding at December 31, 2020, is as follows:

		Options Outstanding				Options Exercisable
			Weighted-
			Average	Weighted-			Weighted-
			Remaining	Average			Average
Exercise		Number	Contractual	Exercise		Number	Exercise
Prices		Outstanding	Life	Price		Exercisable	Price
$	6.60	19,250	1.19 years	$	6.60	19,250	$	6.60
	6.80	11,250	0.16 years		6.80	11,250		6.80
	9.48	18,500	2.19 years		9.48	18,500		9.48
	9.60	21,750	2.99 years		9.60	21,750		9.60
	11.76	2,266	1.50 years		11.76	2,266		11.76
	15.05	26,601	4.57 years		15.05	26,601		15.05
Outstanding, end of period		99,617	2.57 years	$	10.19	99,617	$	10.19

The Company did not recognize any stock option-based compensation expense for the period ended December 31, 2020, as all stock options are fully vested.  During the period ended December 31, 2019, stock option-based compensation was $121 thousand.

The intrinsic value of options exercised during the periods ended December 31, 2020 and 2019 was $190 thousand and $372 thousand, respectively. The aggregate intrinsic value of total options outstanding and exercisable options at December 31, 2020, was $792 thousand. Cash received from options exercised under all share-based payment arrangements for the period ended December 31, 2020, was $339 thousand.

No options vested during the periods ended December 31, 2020, and 2019, respectively. The income tax benefit recognized for the exercise of options during the periods ended December 31, 2020 and 2019 was $18 thousand and $61 thousand, respectively.

As of December 31, 2020, all options were fully vested and currently no future compensation cost will be recognized related to nonvested stock-based compensation arrangements granted under the Plans.

Restricted Stock Awards:

A summary of the activity of the Company’s unvested restricted stock awards for the year ended December 31, 2020 is presented below:

The following table summarizes activity relating to non-vested restricted stock awards:

		Weighted
		Average
		Grant-Date
	Number	Fair Value
Balance at December 31, 2019	65,400	$	21.04
Granted	43,613		15.95
Vested	(7,295)		18.32
Forfeited/expired	(1,500)		18.12
Balance at December 31, 2020	100,218	$	19.07

The Company measures the fair value of restricted stock awards based on the price of the Company’s common stock on the grant date, and compensation expense is recorded over the vesting period. The compensation expense for restricted stock awards during the periods ended December 31, 2020 and 2019, was $482 thousand and $396 thousand, respectively. As of December 31, 2020, there was $1.0 million, respectively, of unrecognized compensation cost related to non-vested restricted stock awards granted under the plan. The cost is expected to be recognized over a weighted average period of 2.85 years. The grant-date fair value of restricted stock awards vested was $134 thousand for the period ended December 31, 2020.

Stock Appreciation Rights ("SARs"):

When SAR’s are issued, they are assigned an exercisable price based on the closing stock price on the date of grant.  The SAR’s are recorded at fair market value and adjusted through salaries and employee benefits expense.  The SAR’s will be settled through cash based on the difference of Company’s closing stock price on exercise date and original grant date stock price.  SARs compensation expense of $51 thousand and $134 thousand was recognized for the years ended December 31, 2020 and 2019, respectively.

A summary of the status of SARs plans is presented in the following table:

		Weighted
		Average
	Number	Exercisable Price
Outstanding at December 31, 2018	50,000	$	21.64
Granted	21,000		18.12
Exercised	—		—
Forfeited/Expired	(4,000)		21.67
Outstanding at December 31, 2019	67,000		20.54
Granted	18,000		15.19
Exercised	—		—
Forfeited/Expired	(12,000)		21.72
Outstanding at December 31, 2020	73,000	$	19.02

Information pertaining to SARs outstanding at December 31, 2020, is as follows:

		SARs Outstanding				SARs Exercisable
			Weighted-
			Average	Weighted-
			Remaining	Average			Weighted- Average
Exercise		Number	Contractual	Exercise		Number	Exercise
Prices		Outstanding	Life		Price	Exercisable	Price
$	15.19	18,000	3.00 years	$	15.19	—	$	—
	18.12	21,000	2.00 years		18.12	—		—
	21.61	34,000	1.00 years		21.61	—		—
	Outstanding, end of period	73,000	1.78 years	$	19.02	—	$	—