Stock Based Compensation

3 Months Ended

Mar. 31, 2014

Stock Based Compensation

Stock Based Compensation:

During 2012, the Company, with the approval of shareholders, created the 2012 Equity Incentive Plan (the “Plan”). The Plan permits the award of up to 500 thousand shares to the Company’s directors and employees to promote the Company’s long-term financial success by motivating performance through long-term incentive compensation and to better align the interests of its employees with those of its shareholders. 46,957 share awards were granted under the Plan during February 2014. As of March 31, 2014, there was $318 thousand of total unrecognized compensation expense related to the nonvested shares granted under the Plan.  The remaining cost is expected to be recognized over 2.75 years. No share awards were issued during the period ended March 31, 2013.

The following is the activity under the Plan during the three months ended March 31, 2014:

	Restricted Stock Units
March 31, 2014	Units		Weighted Average Grant Date Fair Value
Beginning balance		0	$	0
Granted		46,957		7.39
Vested		0		0
Forfeited		0		0
Ending balance		46,957	$	7.39

The Company’s Stock Option Plan, which was shareholder-approved and has since expired, permitted the grant of share options to its directors, officers and employees for up to 375 thousand shares of common stock. Option awards were granted with an exercise price equal to the market price of the Company’s common stock at the date of grant; those option awards have vesting periods of 5 years and have 10-year contractual terms. During the period ended March 31, 2014 the last remaining 5,000 outstanding options were exercised and the Company satisfied these options with the reissuance of treasury shares.

The fair value of each option award is estimated on the date of grant using a Black-Scholes model. Total compensation cost charged against income for the stock option plan for the three month period ended March 31, 2014 was not material. No related income tax benefit was recorded.