Stock Compensation Plans

12 Months Ended

Dec. 31, 2012

Disclosure Of Compensation Related Costs, Share-Based Payments [Abstract]

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

16. Stock Compensation Plans

The Corporation’s 2007 Stock Incentive Plan and Trust (the Plan), which is shareholder-approved, permits the grant of restricted stock awards and options to its directors, officers and employees for up to 177,496 shares of common stock. Incentive stock options, non-incentive or compensatory stock options and share awards may be granted under the Plan. The exercise price of each option shall at least equal the market price of a share of common stock on the date of grant and have a contractual term of ten years. Options shall vest and become exercisable at the rate, to the extent and subject to such limitations as may be specified by the Corporation. Compensation cost related to share-based payment transactions must be recognized in the financial statements with measurement based upon the fair value of the equity instruments issued.

During 2012 and 2011, the Corporation granted restricted stock awards of 9,900 and 8,000 shares, respectively, with a face value of $196,000 and $121,000, respectively, based on the weighted-average grant date stock prices of $19.79 and $15.17, respectively. In addition, during 2011, 500 options were granted under the plan. These options and restricted stock awards are 100% vested on the third anniversary of the date of grant. For the year ended December 31, 2012 and 2011, the Corporation recognized $113,000 and $98,000, respectively, in stock compensation expense.

The fair value of each option grant was estimated on the date of grant using the Black-Scholes option-pricing model with the following weighted-average assumptions:

Weighted-average for the year
ended December 31,	2012		2011
Dividend yield		-		4.25	%
Expected life		-		10 years
Expected volatility		-		18.14	%
Risk-free interest rate		-		1.99	%

The expected volatility is based on historical stock price fluctuations. The risk-free interest rates for periods within the contractual life of the awards are based on the U.S. Treasury yield curve in effect at the time of the grant. The expected life is based on the maximum term of the options. The dividend yield assumption is based on the Corporation’s history and expectation of dividend payouts.

A summary of option activity under the Plan as of December 31, 2012, and changes during the period then ended is presented below:

								Weighted-Average
				Weighted-Average		Aggregate		Remaining Term
	Options			Exercise Price		Intrinsic Value		(in years)
Outstanding as of January 1, 2012		94,000		$	24.51	$	-		6.0
Granted		-			-		-		-
Exercised		(750	)		13.50				-
Forfeited		(7,000	)		22.29		-		-
Outstanding as of December 31, 2012		86,250		$	24.79	$	-		4.9
Exercisable as of December 31, 2012		83,500		$	25.06	$	-		4.8

A summary of the status of the Corporation’s nonvested restricted stock awards as of December 31, 2012, and changes during the period then ended is presented below:

				Weighted-Average
	Shares			Grant-date Fair Value
Nonvested at January 1, 2012		22,500		$	15.07
Granted		9,900			19.79
Vested		(6,750	)		13.50
Forfeited		-			-
Nonvested as of December 31, 2012		25,650		$	17.30

As of December 31, 2012, there was $298,000 of total unrecognized compensation cost related to nonvested share-based compensation arrangements granted under the Plan. That cost is expected to be recognized over the next three years.