Share-Based Compensation

6 Months Ended

Jun. 30, 2022

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 and non-employee directors 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 June 30, 2022 only restricted stock has been granted under the Incentive Stock Plan.

Restricted stock activity for the six months ended June 30, 2022 is summarized below:

	Shares			Weighted Average Grant Date Fair Value
Nonvested, January 1, 2022		38,435		$	20.49
Issued		20,809			25.65
Vested		(13,152	)		21.93
Forfeited		-			-
Nonvested, June 30, 2022		46,092		$	22.41

The weighted average period over which nonvested awards are expected to be recognized in compensation expense is 1.91 years.

The fair value of restricted stock granted during the six months ended June 30, 2022 and 2021 was $534 thousand and $403 thousand, respectively.

The remaining unrecognized compensation expense for nonvested restricted stock shares totaled $663 thousand as of June 30, 2022 and $527 thousand as of June 30, 2021.

Stock-based compensation expense was $103 thousand and $69 thousand for the three months ended June 30, 2022 and 2021, respectively, and $174 thousand and $130 thousand for the six months ended June 30, 2022 and 2021, respectively.

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 2021 and for the first six months of 2022.

Total stock purchases under the ESPP amounted to 2,815 shares during the six months ended June 30, 2022. At June 30, 2022, the Company had 224,728 remaining shares reserved for issuance under the ESPP.