Stock Based Compensation

9 Months Ended

Sep. 30, 2020

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

Disclosure of Compensation Related Costs, Share-based Payments

NOTE 15 – STOCK BASED COMPENSATION

Stock-Based Compensation Plan

On March 27, 2020, the Company’s stockholders approved the 1895 Bancorp of Wisconsin, Inc. 2020 Equity Incentive Plan (the “2020 Equity Incentive Plan”). A total of 238,467 stock options and 95,387 restricted shares were approved for award. The stock options granted to employees and non-employee directors under this plan vest in five installments with the first installment vesting on the first anniversary of the date of grant. The exercise price for all stock options granted is equal to the quoted NASDAQ market close price on the date that the awards were granted and expire ten years after the grant date, if not exercised. The restricted stock awards granted to employees and non-employee directors under this plan vest in five installments with the first installment vesting on the first anniversary of the date of grant.

Accounting for Stock-Based Compensation Plan

The fair value of stock options granted is estimated on the grant date using a Black-Scholes pricing model. The fair value of restricted shares is equal to the quoted NASDAQ market closing price on the date of grant. The fair value of stock grants is recognized as compensation expense on a straight-line basis over the vesting period of the grants. Compensation expense is included in salaries and employee benefits in the consolidated statements of income.

A summary of the Company’s stock option activity for the period ended September 30, 2020 is presented below.

Stock Options	Shares		Weighted Average Exercise Price		Weighted Average Remaining in Contractual Term (Years)		Aggregate Intrinsic Value
Outstanding December 31, 2019		—	$	—		—		—
Granted		218,115		7.89		9.55		394,444
Exercised		—		—		—		—
Forfeited		—		—		—		—
Outstanding September 30, 2020		218,115		7.89		9.55		394,444
Options exercisable at September 30, 2020		—		—		—		—

The Company amortizes the expense related to stock options as compensation expense over the vesting period. The Company recognized $22,000 and $39,000 in stock option expense during the three and nine month period ended September 30, 2020, respectively. At September 30, 2020, the Company had $392,000 in estimated unrecognized compensation costs related to outstanding stock options that is expected to be recognized over a weighted average period of five years.

Restricted Stock	Shares		Weighted Average Grant Date Fair Value
Nonvested at December 31, 2019		—	$	—
Granted		84,949		7.87
Vested		—		—
Forfeited		—		—
Nonvested at September 30, 2020		84,949	$	7.87

The Company amortizes the expense related to restricted stock awards as compensation expense over the vesting period. The Company recognized $33,000 and $60,000 in restricted stock option expense during the three and nine month period ended September 30, 2020, respectively. At September 30, 2020, the Company had $607,000 of unrecognized compensation expense related to restricted stock shares that is expected to be recognized over a weighted average period of five years.