4. STOCK-BASED COMPENSATION

The Company maintains shareholder-approved, stock-based incentive plans which permit the granting of options to purchase common stock of the Company and awards of restricted shares of common stock. All employees, non-employee directors and consultants of the Company and its affiliates are eligible to receive awards under the plans. The plans authorize the granting of awards in the form of options intended to qualify as incentive stock options under Section 422 of the Internal Revenue Code, options that do not so qualify (non-statutory stock options) and granting of restricted shares of common stock. Stock option awards are generally granted with an exercise price equal to the market value of the Company’s shares at the date of grant and generally vest over a period of three to five years. The exercise period for all stock options generally may not exceed 10 years from the date of grant. Restricted stock awards generally vest over a period of two to five years. Generally, option and share awards provide for accelerated vesting if there is a change in control (as defined in the plans). Shares used to satisfy stock awards and stock option exercises are generally issued from treasury stock. At March 31, 2013, the Company had 568,184 reserved but unissued shares that can be awarded in the form of stock options or restricted share awards.

Restricted Stock Awards - A summary of activity in the Company’s restricted stock awards as of and for the six-month period ended March 31, 2013 is as follows:

			Weighted
			Average
	Number		Grant-Date
	Of Shares		Fair Value
Nonvested at September 30, 2012	365,170		$	7.13
Granted	37,092		8.58
Vested	(137,861	)	7.27
Forfeited	—		—
Nonvested at March 31, 2013	264,401		$	7.27

During the year ended September 30, 2012, the Company granted an aggregate of 250,000 shares of contingent, performance-based restricted stock to six executive officers. The shares of restricted stock vest as follows: 25% on the date of the filing of the annual report on Form 10-K for the year ended September 30, 2012; 25% on the date of the filing of the annual report on Form 10-K for the year ended September 30, 2013; and 50% on the date of the filing of the annual report on Form 10-K for the year ended September 30, 2014. In each case the vesting is subject to the Company’s achievement of certain earnings per share targets. The grants do not provide for partial vesting for performance levels achieved below the stated targets nor will additional shares be granted if the Company’s performance exceeds the earnings per share targets. If an earnings per share target is not met, vesting may still occur in a subsequent period based on cumulative results. Additionally, recipients cannot receive the final vesting unless the Company’s total shareholder return exceeds certain peer indices. One-third of the shares received are required to be held until the earlier of retirement or five years from the date of vesting.

Stock Option Awards - A summary of activity in the Company’s stock option program as of and for the six months ended March 31, 2013 is as follows:

							Weighted
			Weighted				Average
			Average		Aggregate		Remaining
	Number		Exercise		Intrinsic		Contractual
	Of Shares		Price		Value		Life (years)
Outstanding at September 30, 2012	629,936		$	11.20
Granted	17,500		8.39
Exercised	(8,400	)	7.61
Forfeited	(18,100	)	9.59
Outstanding at March 31, 2013	620,936		$	11.22	$	578,534	4.4
Exercisable at March 31, 2013	571,053		$	11.26	$	531,868	4.2

The weighted-average fair value per share of stock options granted during the six months ended March 31, 2013 was $2.12. Cash received from stock options exercised during the six months ended March 31, 2013 totaled $64,000. The total intrinsic value of stock options exercised during the six months ended March 31, 2013 was $9,000.

As of March 31, 2013, the total unrecognized compensation expense related to nonvested stock options and restricted stock awards was approximately $39,000 and $1.1 million, respectively, and the related weighted average periods over which it is expected to be recognized is approximately 1.0 and 1.6 years, respectively.

There were no stock options granted during the six months ended March 31, 2012. The fair value of stock options granted during the six months ended March 31, 2013 was estimated on the dates of grant using the Black-Scholes option pricing model with the following average assumptions:

Risk-free interest rate	0.85	%
Expected volatility	44.36	%
Expected life in years	6.0
Dividend yield	5.02	%
Expected forfeiture rate	5.30	%

Equity Trust Plan - The Company maintains a deferred compensation plan (“Equity Trust Plan”) for the benefit of key loan officers and sales staff. The plan is designed to recruit and retain top-performing loan officers and other key revenue-producing employees who are instrumental to the Company’s success. The plan allows the recipients to defer a percentage of commissions earned into a rabbi trust for the benefit of the participants. The assets of the trust are limited to shares of Company common stock and cash. Awards related to participant contributions generally vest immediately or over a period of two to five years. Awards related to Company contributions generally vest over a period of three to five years. The participants will generally forgo any accrued but unvested benefits if they voluntarily leave the Company. Vested shares in the plan are treated as issued and outstanding when computing basic and diluted earnings per share, whereas unvested shares are treated as issued and outstanding only when computing diluted earnings per share. During the six months ended March 31, 2013, the plan purchased 10,100 shares on behalf of the participants at an average price of $9.90 and distributed 30,005 vested shares to participants with an aggregate market value at the time of distribution of $297,000. At March 31, 2013, there were 372,163 shares in the plan with an aggregate carrying value of $3.3 million. Such shares were included in treasury stock in the Company’s consolidated financial statements, including 181,435 shares that were not yet vested.