Stock incentive plan

9 Months Ended

Sep. 30, 2022

Stock incentive plan

Stock incentive plan

Note 10 – Stock incentive plan

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 option activity under the Company's stock incentive plans during the indicated periods:

	Nine Months Ended September 30,
	2022							2021
		Weighted							Weighted
		Average							Average
		Exercise		Fair Value		Intrinsic			Exercise		Fair Value		Intrinsic
	Options	Price		Per Share		Value			Price		Per Share		Value
Options outstanding, beginning of period	734	$	25.63	$	9.76			734	$	25.63	$	9.76
Granted	—		—		—			—		—		—
Forfeited	—		—		—			—		—		—
Exercised	(345)		25.50	$	9.76			—		—		—
Options outstanding, end of period	389	$	25.74	$	9.76	$	—	734	$	25.63	$	9.76	$	—
Options exercisable, end of period	389							734

During the nine months ended September 30, 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 the nine months ended September 30, 2022, 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 begins on January 2, 2023, 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.

The total number of shares underlying non-vested restricted stock was 16,316 and 17,077 at September 30, 2022 and 2021, 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 related to non-vested share-based compensation arrangements granted under the stock incentive plan as of September 30, 2022 and 2021 was $551,691 and $437,600, respectively. The time-based unrecognized compensation of $363,742 is expected to be recognized over a weighted average period of 1.73 years. For the periods ended September 30, 2022, there were 924 forfeitures of restricted stock and restricted stock units, and no forfeitures for the period ended September 30, 2021.

A summary of changes in the Company’s non-vested restricted stock and restricted stock unit awards for the nine months ended September 30, 2022 follows:

		Weighted-
		Average		Aggregate
		Grant-Date		Intrinsic
	Shares	Fair-Value		Value
December 31, 2021	23,734	$	37.46	$	1,142,792
Granted	3,341		54.56		160,869
Vested	(11,270)		32.30		(542,651)
Forfeited	(924)		34.30		(44,491)
Other	1,435		32.32		69,095
September 30, 2022	16,316	$	44.25	$	785,615

Stock-based compensation expense was approximately $272,000 and $218,000 for the nine months ended September 30, 2022 and 2021, respectively.