NOTE

– STOCK-BASED COMPENSATION

The Company has fully vested and unvested stock options and unvested restricted stock awards outstanding under the

2017

Equity Incentive Plan.

A summary of stock option activity during the

six

months ended

June 30, 2019

and

2018

is presented below:

	For the Six Months Ended June 30, 2019
						Average
				Weighted-		Remaining
				Average		Contractual
	Shares			Exercise Price		Term (years)

Outstanding, December 31, 2018		164,410		$	14.69	5.8
Granted		1,000			14.63	7.0
Exercised		(7,260	)		9.65	-
Forfeited or expired		(4,800	)		14.90	-

Outstanding, June 30, 2019		153,350		$	14.92	5.5

Exercisable, June 30, 2019		31,430		$	14.91	5.4

	For the Six Months Ended June 30, 2018
						Average
				Weighted-		Remaining
				Average		Contractual
	Shares			Exercise Price		Term (years)

Outstanding, December 31, 2017		207,108		$	14.18	6.2
Granted		5,000			15.48	7.0
Exercised		(15,464	)		9.65	-
Forfeited or expired		(7,734	)		11.08	-

Outstanding, June 30, 2018		188,910		$	14.71	6.2

Exercisable, June 30, 2018		7,260		$	9.65	1.0

The exercise price of outstanding stock options at

June 30, 2019

range from

$14.63

$15.48

per share. The grant date fair value of stock options awarded in the

six

months ended

June 30, 2019

was

$3.77

using the Black-Scholes-Merton options pricing model with the following inputs and assumptions:

Grant date stock price	$	14.63
Dividend yield		0.00	%
Expected volatility		19.55	%
Risk-free interest rate		2.63	%
Expected life in years		6

A summary of restricted stock activity during the

six

months ended

June 30, 2019

and

2018

is presented below:

				Weighted		Average
				Average		Remaining
				Grant Date		Contractual
	Shares			Price		Term (years)

	For the Six Months Ended June 30, 2019

Outstanding, December 31, 2018		49,829		$	14.90		4.0

Granted		-			-
Vested		(85	)	$	15.48
Forfeited or expired		(1,200	)	$	14.90

Outstanding, June 30, 2019		48,544		$	14.90		3.5

	For the Six Months Ended June 30, 2018

Outstanding, December 31, 2017		74,750	$	14.90	4.9

Granted		429		15.48	5.0
Vested		-		-
Forfeited or expired		-		-

Outstanding, June 30, 2018		75,179	$	14.90	4.5

Compensation and benefits included

$147,000

and

$267,000

of stock-based expense for the

six

months ended

June 30, 2019

and

2018,

respectively. Restricted stock award dividends included in stock-based expense were

$2,000

and

$94,000

for the

six

months ended

June 30, 2019

and

2018,

respectively.

As of

June 30, 2019,

there was

$1.0

million of total unrecognized stock-based expense including

$388,000

related to unvested stock options and

$619,000

from restricted stock awards granted under the

2017

Equity Incentive Plan that is expected to be recognized ratably over the next

3.5

years.