Stock incentive plan

12 Months Ended

Dec. 31, 2021

Stock incentive plan

Stock incentive plan

Note 14. Stock Incentive Plans

In accordance with accounting standards, the Company measures the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award (with limited exceptions). That cost is recognized over the period during which an employee is required to provide service in exchange for the award rather than disclosed in the financial statements.

The following table summarizes options outstanding under the Company’s stock incentive plans at the indicated dates:

	Year Ended December 31,
	2021							2020
		Weighted								Weighted
		Average								Average
		Exercise		Fair Value		Intrinsic				Exercise		Fair Value		Intrinsic
	Options	Price		Per Share		Value		Options		Price		Per Share		Value
Options outstanding, beginning of period	734	$	25.63	$	9.76				734	$	25.63	$	9.76
Granted	—		—		—				—		—		—
Forfeited	—		—		—				—		—		—
Exercised	—		—		—				—		—		—
Options outstanding, end of period	734	$	25.63	$	9.76	$	—		734	$	25.63	$	9.76	$	—
Options exercisable, end of period	734								734

The following table summarizes information about stock options outstanding at December 31, 2021:

	Outstanding				Exercisable
		Weighted
		Average
		Remaining	Weighted			Weighted
		Years of	Average			Average
Range of	Number of	Contractual	Exercise		Number of	Exercise
Exercise Prices	Options	Life	Price		Options	Price
$25.28-$25.76	734	1.56	$	25.63	734	$	25.63
	734	1.56		25.63	734		25.63

During 2021, we granted certain officers time-based restricted shares of common stock and performance-based restricted stock units.  The time-based restricted shares vest ratably over a three year period provided the officer is employed with the Company on the applicable vesting date.  The performance-based units, which have a two-year performance period that began on January 2, 2022, vest based on the Company’s achievement of performance targets related to return on tangible common equity over the performance period, with possible payouts ranging from 0% to 150% of the target awards.

During 2020, we granted certain officers time-based restricted shares of common stock and performance-based restricted stock units.  The time-based restricted shares vest ratably over a three year period provided the officer is employed with the Company on the applicable vesting date.  The performance-based units, which have a two-year performance period that began on January 2, 2021, vest based on the Company’s achievement of performance targets related to return on tangible common equity and the adversely classified items ratio over the performance period, with possible payouts ranging from 0% to 150% of the target awards.

The total number of shares underlying non-vested restricted stock was 23,734 and 25,247 at December 31, 2021 and 2020, respectively. The fair value of the stock is based on the grant date of the award and the expense is recognized over the vesting period. Unamortized stock-based compensation expense related to non-vested share-based compensation arrangements granted under the stock incentive plan as of December 31, 2021 and 2020 was $688,000 and $593,000, respectively. The time-based unrecognized compensation expense of $591,000 is expected to be recognized over a weighted average period of 2.23 years. During 2021, there were no forfeitures of shares of restricted stock awards. During 2020, there were forfeitures of 1,094 shares of restricted stock awards.

A summary of changes in the Company’s non-vested restricted stock awards for the year follows:

		Weighted-
		Average		Aggregate
		Grant-Date		Intrinsic
	Shares	Fair-Value		Value
December 31, 2020	25,247	$	30.88	$	1,460,539
Granted	6,724		54.48		—
Vested	(8,838)		31.26		(511,278)
Forfeited	—		—		—
Other(1)	601		31.86		34,768
December 31, 2021	23,734	$	37.45	$	1,373,012

(1) Represents the incremental increase in shares that vested based on the restricted stock units vesting at the maximum potential value as opposed to the targeted value of the award.

Stock-based compensation expense was $332,000 and $240,000 for the years ended December 31, 2021 and 2020, respectively.