SHAREHOLDERS’ EQUITY

12 Months Ended

Dec. 31, 2020

Equity [Abstract]

SHAREHOLDERS’ EQUITY

13. SHAREHOLDERS’ EQUITY

Earnings Per Share

A reconciliation of the numerators and denominators of the basic and diluted earnings per share computations is as follows (dollars and shares in thousands, except per share data):

			Weighted
			Average
			Number of
	Net		Shares		Per-Share
For the Year Ended	Income		Outstanding		Amount
December 31, 2020
Basic earnings per share	$	7,055		5,871	$	1.20
Effect of dilutive stock-based compensation		—		17
Diluted earnings per share	$	7,055		5,888	$	1.20
December 31, 2019
Basic earnings per share	$	5,500		5,847	$	0.94
Effect of dilutive stock-based compensation		—		22
Diluted earnings per share	$	5,500		5,869	$	0.94
December 31, 2018
Basic earnings per share	$	4,900		5,871	$	0.83
Effect of dilutive stock-based compensation		—		38
Diluted earnings per share	$	4,900		5,909	$	0.83

No shares were antidilutive for the year ended December 31, 2020, 2019 or 2018.

AMERICAN RIVER BANKSHARES AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Continued)

13. SHAREHOLDERS’ EQUITY (Continued)

Stock Based Compensation

On March 17, 2010, the Board of Directors adopted the 2010 Equity Incentive Plan (the “2010 Plan”). The 2010 Plan was approved by the Company’s shareholders on May 20, 2010. At December 31, 2020, 29,958 options and 38,865 restricted stock awards remain outstanding. The 2010 Plan expired by its term on March 17, 2020. Accordingly, outstanding awards under the 2010 Plan are exercisable and will continue to vest until their expiration, but no new awards may be granted under the 2010 Plan. On March 18, 2020, the Board of Directors adopted the 2020 Equity Incentive Plan (the “2020 Plan”). The 2020 Plan was approved by the Company’s shareholders on May 21, 2020. At December 31, 2020 there were 19,634 restricted shares outstanding, zero stock options outstanding, and the total number of authorized shares that remain available for issuance under the 2020 Plan, including the 19,634 restricted shares that have not yet vested, was 250,000. The 2020 Plan provides for the following types of stock-based awards: incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock, restricted performance stock, unrestricted Company stock, and performance units. Under the 2020 Plan, the awards may be granted to employees and directors under incentive and nonqualified option agreements, restricted stock agreements, and other award agreements. The unvested restricted stock under the 2020 Plan have dividend and voting rights. The 2020 Plan requires that the option price may not be less than the fair market value of the stock at the date the option is awarded. The option awards expire on dates determined by the Board of Directors, but not later than ten years from the date of award. The vesting period is generally five years; however, the vesting period can be modified at the discretion of the Company’s Board of Directors. Outstanding option awards under the 2010 Plan are exercisable until their expiration.

There were no stock options granted in 2018, 2019 or 2020.

A summary of the outstanding and nonvested stock option activity for the year ended December 31, 2020 is as follows:

	Outstanding				Nonvested
			Weighted					Weighted
			Average					Average
			Exercise					Grant Date
			Price					Fair Value
	Shares		Per Share		Shares			Per Share
Balance, January 1, 2020		29,958	$	8.79		2,223		$	3.24
Options granted		—	$	—		—		$	—
Options vested		—	$	—		(2,223	)	$	3.24
Options exercised		—	$	—		—		$	—
Options expired or canceled		—	$	—		—		$	—
Balance, December 31, 2020		29,958	$	8.79		—		$	—

A summary of options as of December 31, 2020 is as follows (there were no unvested stock options):

Vested:
Number of vested stock options		29,958
Weighted average exercise price per share	$	8.79
Aggregate intrinsic value	$	130,617
Weighted average remaining contractual term in years		3.40

AMERICAN RIVER BANKSHARES AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Continued)

13. SHAREHOLDERS’ EQUITY (Continued)

Restricted Stock

Restricted stock awards are grants of shares of the Company’s common stock that are subject to forfeiture until specific conditions or goals are met. Conditions may be based on continuing employment or service and/or achieving specified performance goals. During the period of restriction, Plan participants holding restricted share awards have voting and cash dividend rights. The restrictions lapse in accordance with a schedule or with other conditions determined by the Board of Directors as reflected in each award agreement. Upon the vesting of each restricted stock award, the Company issues the associated common shares from its inventory of authorized common shares. All outstanding awards under the Plan immediately vest in the event of a change of control of the Company. The shares associated with any awards that fail to vest become available for re-issuance under the Plan. The following is a summary of stock-based compensation information as of or for the years ended December 31, 2020, 2019 and 2018:

There were 39,131 shares of restricted stock awarded during 2020. Of the 39,131 restricted common shares, 13,667 will vest one year from the date of the award, 19,497 will vest 33% per year from the date of the award, and 5,967 will vest 20% per year from the date of the award. There were 33,968 shares of restricted stock awarded during 2019. Of the 33,968 restricted common shares, 11,076 will vest one year from the date of the award, 18,394 will vest 33% per year from the date of the award, and 4,498 will vest 20% per year from the date of the award.

				Weighted
				Average
				Grant Date
Restricted Stock	Shares			Fair Value
Nonvested at January 1, 2020		43,971		$	13.95
Awarded		39,131		$	12.45
Vested		(24,123	)	$	13.76
Cancelled		(480	)	$	13.23
Nonvested at December 31, 2020		58,499		$	13.03

The shares awarded to employees and directors under the restricted stock agreements vest on applicable vesting dates only to the extent the recipient of the shares is then an employee or a director of the Company or one of its subsidiaries, and each recipient will forfeit all of the shares that have not vested on the date his or her employment or service is terminated. New shares are issued upon vesting of the restricted common stock. 

AMERICAN RIVER BANKSHARES AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Continued)

13. SHAREHOLDERS’ EQUITY (Continued)

Restricted Stock (Continued)
	2020		2019		2018
	(Dollars in thousands)
Total intrinsic value of options exercised	$	—	$	60	$	137
Aggregate cash received for option exercises	$	—	$	95	$	189
Total fair value of options vested	$	7	$	15	$	14
Total compensation cost, options and restricted stock	$	425	$	338	$	227
Tax benefit recognized	$	114	$	88	$	53
Net compensation cost, options and restricted stock	$	311	$	250	$	174
Total compensation cost for nonvested option awards not yet recognized	$	—	$	3	$	17
Weighted average years for compensation cost for nonvested options to be recognized		—		0.3		1.0
Total compensation cost for restricted stock not yet recognized	$	460	$	394	$	318
Weighted average years for compensation cost for restricted stock to be recognized		1.0		0.8		0.8

The intrinsic value used for stock options and restricted stock awards was derived from the market price of the Company’s common stock of $13.15 as of December 31, 2020.

Other Equity Awards

There were no stock appreciation rights, restricted performance stock, unrestricted Company stock, or performance units awarded during 2020 or 2019 or outstanding at December 31, 2020 or December 31, 2019.

Stock Repurchase Program

The Company did not repurchase shares of its common stock during 2019 or 2020.