Stock-Based Compensation

12 Months Ended

Dec. 31, 2021

Share-based Payment Arrangement [Abstract]

STOCK-BASED COMPENSATION

The Equity Plan governs the Company’s restricted stock and stock options. Total compensation cost that was charged against income related to the Equity Plan was $461 and $397 for the years ended December 31, 2021 and 2020, respectively.

Restricted Stock

During the fourth quarter of 2020 and the first quarter of 2021, the Company awarded a total of 22,716 shares of restricted stock to Executive Officers representing a portion of their bonuses which vested immediately. Prior to 2019, the Company awarded shares of restricted common stock to certain officers for which compensation expense is recognized ratably over the five-year vesting period of the awards based on the fair value of the stock at issue date.

A summary of changes in the Company’s nonvested restricted shares for the year ended December 31, 2021 follows:


	Shares	Weighted-Average Grant-Date Fair Value, per share
Nonvested at January 1, 2021	4,130	$	14.63
Granted	4,008	13.33
Vested	(5,655)	13.61
Forfeited	—	—
Nonvested at December 31, 2021	2,483	$	14.86

At December 31, 2021 there was $14 of total unrecognized compensation cost related to nonvested restricted shares granted under the Equity Plan that is expected to be recognized over a weighted average period of 0.6 years. The total fair value of shares vested during the years ended December 31, 2021 and 2020 was $85 and $321, respectively.

Stock Options

The Equity Plan permits the grant of stock options to the Company’s employees and non-employee directors for up to 15% of the total number of shares of Company common stock issued and outstanding, up to 1,500,000 shares. Option awards are generally granted with an exercise price equal to the market price of the Company’s common stock at the date of grant. The market price of the Company’s common stock is the closing sales price of the Common Stock on such date on the securities exchange having the greatest volume of trading in the Common Stock during the 30-day period preceding the day the value is to be determined or, if there is no reported closing sales price on such date, the next preceding date on which there was a reported closing price. Those option awards generally have a vesting period of 5 years for employees and 3 years for non-employee directors and have 10-year contractual terms.

The fair value of each option award is estimated on the date of grant using a closed form option valuation (Black-Scholes) model that uses the assumptions noted in the table below. Expected volatilities are based on an average of historical volatilities of peer financial institutions. The expected term of options granted represents the period of time that options granted are expected to be outstanding, which takes into account that the options are not transferable. The risk-free interest rate for the expected term of the option is based on the U.S. Treasury yield curve in effect at the time of grant.

The fair value of options granted during the year ended December 31, 2021 were determined using the following weighted average assumptions as of grant date:


			December 31, 2021
Risk-free interest rate (%)			0.82
Expected term (years)			7.50
Expected stock price volatility (%)			29.57
Dividend yield (%)			1.82

A summary of the activity in the Equity Plan for the year ended December 31, 2021 follows:


	Shares	Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value
Outstanding at January 1, 2021	332,708	$	16.01
Granted	127,275	14.67
Exercised	—	—
Forfeited	(3,600)	15.13
Expired	(5,625)	16.45
Outstanding at December 31, 2021	450,758	$	15.64	7.71	$	3,216
Vested and exercisable at December 31, 2021	180,318	$	16.52	6.96	$	1,191

The weighted average fair value of options granted during the years ended December 31, 2021 and 2020 was $3.70 and $3.71, respectively. Total unrecognized compensation cost related to nonvested stock options granted under the Equity Plan was $622 at December 31, 2021. This cost is expected to be recognized over a weighted average period of 2.33 years.