EQUITY AWARDS

6 Months Ended

Jun. 30, 2021

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

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, 2021 and 2020 follows:


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		9.61		22
Exercised		(28,590	)		22.28		3.38		337
Forfeited		(19,020	)		26.01		7.09		153

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


Six Months Ended June 30, 2020	Number of Shares			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Life in Years		Aggregate Intrinsic Value
Outstanding at beginning of year		508,000		$	26.68		6.24	$	3,159
Granted		35,000			27.64		9.72		41
Exercised		(3,000	)		24.00		2.29		6
Forfeited		(28,200	)		31.93		8.16		—

Balance, June 30, 2020		511,800		$	26.47		5.90	$	607


Exercisable at end of period		284,620		$	25.28		4.88	$	438

A summary of nonvested stock option activity in the Plan during the six months ended June 30, 2021 and 2020 follows:


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


Six Months Ended June 30, 2020	Number of Shares			Weighted-Average Grant Date Fair Value
Outstanding at beginning of year		251,120		$	4.97
Granted		35,000			4.13
Vested		(35,740	)		(6.43	)
Forfeited		(23,200	)		(3.13	)

Balance, June 30, 2020		227,180		$	5.55

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


	June 30, 2021		June 30, 2020
Intrinsic value of options exercised	$	337	$	6
Cash received from options exercised	$	636		72
Weighted average fair value of options granted		5.67		4.13

Restricted Stock Awards and Units

A summary of restricted stock activity in the Plan during the six months ended June 30, 2021 and 2020 follows:


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			—
Granted		—			—
Vested		(4,840	)		30.25
Forfeited		—			—

Balance, June 30, 2021		33,990		$	26.95


Six Months Ended June 30, 2020	Number of Shares			Weighted-Average Grant Date Fair Value
Outstanding at beginning of year		31,459		$	30.29
Granted		—			—
Vested		(10,100	)		30.25
Forfeited		—			—

Balance, June 30, 2020		21,359		$	30.31

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, 2021, there was $1,772 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 3.17 years.

The Company granted options under the Plan during the first six months of 2021 and 2020. Expense of $329 was recorded during both the six months ended June 30, 2021 and 2020, which represents the fair value of shares vested during those periods.