Share-Based Compensation

6 Months Ended

Jun. 30, 2012

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Share-Based Compensation

Share-Based Compensation

For the six month periods ended June 30, 2012 and 2011, share-based compensation cost recognized was $64,000 and $102,000, respectively. For the quarter ended June 30, 2012 and 2011, shared-based compensation was $14,000 and $52,000, respectively. The recognized tax benefits for stock option compensation expense were $11,000 and $18,000, respectively, for the six month periods ended June 30, 2012 and 2011.  For the quarter ended June 30, 2012 and 2011, recognized tax benefits were $2,000 and $9,000, respectively.

The Company bases the fair value of the options granted on the date of grant using a Black-Scholes Merton option pricing model that uses assumptions based on expected option life and the level of estimated forfeitures, expected stock volatility, risk free interest rate, and dividend yield.  The expected term and level of estimated forfeitures of the Company’s options were based on the Company’s own historical experience.  Stock volatility is based on the historical volatility of the Company’s stock.  The risk-free rate is based on the U. S. Treasury yield curve for the periods within the contractual life of the options in effect at the time of grant.  The compensation cost for options granted is based on the weighted average grant date fair value per share.

No options to purchase shares of the Company’s common stock were issued in the first six months of 2012 and 2011 from any of the Company’s stock based compensation plans. 

A summary of the combined activity of the Company’s Stock Based Compensation Plans for the six month period ended June 30, 2012 follows:

	Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (Years)	Aggregate Intrinsic Value (In thousands)
Options outstanding at January 1, 2012	511,019		$	8.56
Options exercised	(44,350	)	$	5.42
Options canceled	(4,040	)	$	10.34
Options outstanding at June 30, 2012	462,629		$	8.84	3.77	$	155
Options vested or expected to vest at June 30, 2012	446,395		$	8.94	3.67	$	144
Options exercisable at June 30, 2012	390,829		$	9.41	3.00	$	75

The total intrinsic value of 44,350 options exercised in the six months ended June 30, 2012 was $46,000.

Cash received from options exercised for the six months ended June 30, 2012 was $241,000.  The actual tax benefit realized for the tax deductions from options exercised totaled $20,000 and $117,000 for six months ended June 30, 2012 and 2011, respectively.

As of June 30, 2012, there was $132,000 of total unrecognized compensation cost related to non-vested share-based compensation arrangements granted under all plans.  The cost is expected to be recognized over a weighted average period of 3.04 years.