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EQUITY AWARDS
 6 Months Ended
Jun. 30, 2022
Share-Based Payment Arrangement [Abstract]  
EQUITY AWARDS

NOTE 6 – EQUITY AWARDS

The Company’s 2015 Equity Incentive Plan (the “Plan”) was adopted by the Company and approved by its shareholders in April 2015. The maximum number of shares of common stock that may be issued pursuant to stock-based awards under the Plan equals 1,100,000 shares, all of which may be subject to incentive stock option treatment. 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 have vesting periods ranging from 5 to 10 years and have 10-year contractual terms. Restricted stock awards vest under the period of restriction specified within their respective award agreements as determined by the Company. Forfeitures are recognized as they occur, subject to a 90-day grace period for vested options.

The fair value of each option award is estimated on the date of grant using a closed form option valuation (Black-Scholes) model that uses the assumptions noted in the table below. Expected volatilities are based on historical volatilities of the Company’s common stock and similar peer group averages. The Company uses historical data to estimate option exercise and post-vesting termination behavior. The expected term of options granted is based on historical data and represents the period of time that options granted are expected to be outstanding, which takes in to account that the options are not transferable. The risk-free interest rate for the expected term of the option is based on U.S. Treasury yield curve in effect at the time of the grant.

A summary of stock option activity in the Plan during the six months ended June 30, 2022 and 2021 follows:

Six Months Ended June 30, 2022

 

Number of
Shares

 

 

Weighted-
Average
Exercise
Price

 

 

Weighted-
Average
Remaining
Contractual
Life in
Years

 

 

Aggregate
Intrinsic
Value

 

Outstanding at beginning of year

 

 

502,780

 

 

$

25.77

 

 

 

5.59

 

 

$

5,936

 

Granted

 

 

60,000

 

 

 

35.84

 

 

 

 

 

 

 

Exercised

 

 

(20,950

)

 

 

22.60

 

 

 

 

 

 

 

Forfeited

 

 

(20,900

)

 

 

25.95

 

 

 

 

 

 

 

Balance, June 30, 2022

 

 

520,930

 

 

$

27.05

 

 

 

5.62

 

 

$

4,815

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exercisable at end of period

 

 

289,920

 

 

$

24.52

 

 

 

4.07

 

 

$

3,401

 

 

Six Months Ended June 30, 2021

 

Number of
Shares

 

 

Weighted-
Average
Exercise
Price

 

 

Weighted-
Average
Remaining
Contractual
Life in
Years

 

 

Aggregate
Intrinsic
Value

 

Outstanding at beginning of year

 

 

506,200

 

 

$

26.81

 

 

 

5.82

 

 

$

1,805

 

Effect of 10% stock dividend

 

 

50,770

 

 

 

 

 

 

 

 

 

 

Granted

 

 

24,500

 

 

 

33.37

 

 

 

 

 

 

 

Exercised

 

 

(28,590

)

 

 

22.28

 

 

 

 

 

 

 

Forfeited

 

 

(19,020

)

 

 

26.01

 

 

 

 

 

 

 

Balance, June 30, 2021

 

 

533,860

 

 

$

24.84

 

 

 

5.58

 

 

$

4,930

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exercisable at end of period

 

 

312,206

 

 

$

23.58

 

 

 

4.49

 

 

$

3,274

 

A summary of nonvested stock option activity in the Plan during the six months ended June 30, 2022 and 2021 follows:

Six Months Ended June 30, 2022

 

Number of
Shares

 

 

Weighted-Average
Grant
Date Fair Value

 

Outstanding at beginning of year

 

 

207,084

 

 

$

5.23

 

Granted

 

 

60,000

 

 

 

6.40

 

Vested

 

 

(29,694

)

 

 

(6.24

)

Forfeited

 

 

(6,380

)

 

 

(14.82

)

Balance, June 30, 2022

 

 

231,010

 

 

$

5.38

 

 

Six Months Ended June 30, 2021

 

Number of
Shares

 

 

Weighted-Average
Grant
Date Fair Value

 

Outstanding at beginning of year

 

 

214,680

 

 

$

4.46

 

Effect of 10% stock dividend

 

 

23,218

 

 

 

 

Granted

 

 

24,500

 

 

 

5.67

 

Vested

 

 

(31,724

)

 

 

(6.13

)

Forfeited

 

 

(9,020

)

 

 

(8.06

)

Balance, June 30, 2021

 

 

221,654

 

 

$

5.01

 

Information related to stock options in the Plan is as follows for the six months ended:

 

 

June 30, 2022

 

 

June 30, 2021

 

Intrinsic value of options exercised

 

$

286

 

 

$

337

 

Cash received from options exercised

 

 

474

 

 

 

636

 

Weighted average fair value of options granted

 

 

6.40

 

 

 

5.67

 

 

Restricted Stock Awards and Units

A summary of restricted stock activity in the Plan during the six months ended June 30, 2022 and 2021 follows:

Six Months Ended June 30, 2022

 

Number of
Shares

 

 

Weighted-Average
 Grant
Date Fair Value

 

Outstanding at beginning of year

 

 

30,190

 

 

$

27.52

 

Vested

 

 

(4,070

)

 

 

(27.50

)

Balance, June 30, 2022

 

 

26,120

 

 

$

27.52

 

 

Six Months Ended June 30, 2021

 

Number of
Shares

 

 

Weighted-Average
Grant
 Date Fair Value

 

Outstanding at beginning of year

 

 

35,300

 

 

$

29.72

 

Effect of 10% stock dividend

 

 

3,530

 

 

 

 

Vested

 

 

(4,840

)

 

 

(30.25

)

Balance, June 30, 2021

 

 

33,990

 

 

$

26.95

 

Restricted stock granted to employees typically vests over five years, but vesting periods may vary. Compensation expense for these grants will be recognized over the vesting period of the awards based on the fair value of the stock at the issue date.

As of June 30, 2022, there was $1,778 of total unrecognized compensation expense related to unvested stock options granted under the Plan. The expense is expected to be recognized over a weighted-average period of 3.24 years.

The Company granted options under the Plan during the first six months of 2022 and 2021. Expense of $321 and $329 was recorded during the six months ended June 30, 2022 and 2021, respectively, which represents the fair value of shares vested during those periods.