Note 12 - Stock Based Compensation

12 Months Ended

Dec. 31, 2012

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

Note 12. Stock Based Compensation

The Company has a 2005 Stock Option Plan (the Plan) pursuant to which the Board of Directors may grant stock options to directors, officers and employees. Under the fair value recognition provisions of relevant accounting guidance, stock-based compensation cost is measured at the grant date based on the fair value of the award and is recognized as expense on a straight-line basis over the requisite service period, which is the vesting period.

The Company uses the Black-Scholes option pricing model to determine the fair value of stock options. The fair value of the stock based payment awards is affected by the price of our stock and a number of financial assumptions and variables. These variables include the risk free interest rate, expected dividend rate, expected stock price volatility and the expected life of the options.  No options were granted in the years ended December 31, 2012 or 2011.

A summary of option activity under the 2005 stock option plan during the year ended December 31, 2012 is as follows:

	Options Outstanding			Weighted Average Exercise Price		Aggregate Intrinsic Value(1)		Weighted Average Contractual Term (years)
Balance at December 31, 2011		463,100		$	9.42
Granted		–			–
Exercised		–			–
Forfeited		(3,410	)		9.09
Balance at December 31, 2012		459,690		$	9.31	$	–		3.37
Exercisable at December 31, 2012		459,690		$	9.31	$	–		3.37

(1) The aggregate intrinsic value of a stock option in the table above represents the total pre-tax intrinsic value (the amount by which the current market value of the underlying stock exceeds the exercise price of the option) that would have been received by the option holders had all option holders exercised their options on December 31, 2012.

The Company recorded stock based compensation expense of $29 thousand and $22 thousand for the years ended December 31, 2012 and 2011, respectively.

In 2009, the Board of Directors authorized 132,000 shares of common stock for issuance under the Restricted Stock Plan. The plan provides for restricted stock awards to key employees. Restricted shares awarded to employees generally vest over a five year period and compensation expense is charged to income ratably over the vesting period and was $28 thousand in 2012 and $11 thousand in 2011. Compensation is accounted for using the fair market value of the Company’s common stock on the date the restricted shares are awarded. The weighted-average grant date fair value of restricted stock granted in 2012 was $4.20.  The Company granted 20,971 shares of restricted stock under the plan in 2012; there were no restricted stock grants in 2011.

As of December 31, 2012, there was $97 thousand of total unrecognized compensation cost related to restricted stock granted under the Plan. The cost is expected to be recognized through 2017. A summary of the activity for restricted stock awards for the periods indicated is presented below:

	2012					2011
	Shares			Weighted-Average Grant Date Fair Value		Shares			Weighted-Average Grant Date Fair Value
Nonvested at beginning of year		6,566		$	7.16		8,207		$	7.16
Granted		20,971			4.20		–			–
Vested		(1,641	)		7.16		(1,641	)		7.16
Cancelled		–			–		–			–
Nonvested at end of year		25,896		$	4.76		6,566		$	7.16