Note 8. Share-Based Compensation

The Company has adopted an employee stock purchase plan and offers share-based compensation through its equity compensation plan. Share-based compensation arrangements may include stock options, restricted and unrestricted stock awards, restricted stock units, performance units and stock appreciation rights. Accounting standards require all share-based payments to employees to be valued using a fair value method on the date of grant and to be expensed based on that fair value over the applicable vesting period. The Company accounts for forfeitures during the vesting period as they occur.

The 2016 Incentive Stock Plan (the Incentive Stock Plan) permits the issuance of up to 300,000 shares of common stock for awards to key employees and non-employee directors of the Company and its subsidiaries in the form of stock options, restricted stock, restricted stock units, stock appreciation rights, stock awards and performance units. As of September 30, 2018 only restricted stock has been granted under the Incentive Stock Plan.

Restricted stock activity for the nine months ended September 30, 2018 is summarized below:

	Shares		Weighted Average Grant Date Fair Value
Nonvested, January 1, 2018		2,245	$	33.60
Issued		11,444		26.32
Vested		-		-
Forfeited		-		-
Nonvested, September 30, 2018		13,689	$	27.51

The weighted average period over which nonvested awards are expected to be recognized is 1.50 years.

The fair value of restricted stock granted during the nine months ended September 30, 2018 was $301 thousand.

The remaining unrecognized compensation expense for nonvested restricted stock shares totaled $257 thousand as of September 30, 2018.

Stock-based compensation expense was $50 thousand and $103 thousand for the three and nine months ended September 30, 2018, respectively. Stock-based compensation expense for the three and nine months ended September 30, 2017 was $9 thousand.

Under the Company's Employee Stock Purchase Plan (ESPP), substantially all employees of the Company and its subsidiaries can authorize a specific payroll deduction from their base compensation for the periodic purchase of the Company's common stock. Shares of stock are issued quarterly at a discount to the market price of the Company's stock on the day of purchase, which can range from 0-15% and was set at 5% for 2017 and for the first nine months of 2018.

2,644 shares were purchased under the ESPP during the nine months ended September 30, 2018. At September 30, 2018, the Company had 242,809 remaining shares reserved for issuance under this plan.