Stock incentive plan

6 Months Ended

Jun. 30, 2023

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:

	Six Months Ended June 30,
	2023							2022
		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	14	$	25.28	$	9.76			734	$	25.63	$	9.76
Granted	—		—		—			—		—		—
Forfeited	—		—		—			—		—		—
Exercised	—		—	$	—			(345)		25.50		—
Options outstanding, end of period	14	$	25.28	$	9.76	$	—	389	$	25.74	$	9.76	$	—
Options exercisable, end of period	14							389

During the six months ended June 30, 2023, we granted certain officers time-based restricted shares of common stock. 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.  

During the six months ended June 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 began on January 2, 2022, vest based on the Company’s achievement of a performance target 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 25,752 and 23,051 at June 30, 2023 and 2022, 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 June 30, 2023 and 2022 was $885,700 and $663,700, respectively. The time-based unrecognized compensation of $538,600 is expected to be recognized over a weighted average period of 1.85 years. For the period ended June 30, 2023, there were no forfeitures, and there were 606 forfeitures of restricted stock and restricted stock units for the period ended June 30, 2022.

A summary of changes in the Company’s non-vested restricted stock and restricted stock unit awards for the six months ended June 30, 2023 follows:

		Weighted-
		Average		Aggregate
		Grant-Date		Intrinsic
	Shares	Fair-Value		Value
December 31, 2022	28,296	$	46.60	$	1,222,387
Granted	370		52.00		15,984
Vested	(4,399)		31.86		(190,037)
Forfeited	—		—		—
Other (1)	1,485		29.00		64,152
June 30, 2023	25,752	$	48.19	$	1,112,486

(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 approximately $268,000 and $210,000 for the six months ended June 30, 2023 and 2022, respectively.