Shareholders' Equity

12 Months Ended

Dec. 31, 2018

Equity [Abstract]

Shareholders' Equity

7. Shareholders’ Equity

	Common Stock				($000's omitted except for share data)
																Accumulated
	Number				Capital in											Other			Total
	of shares				excess of		Retained						Treasury			Comprehensive			shareholders'
	issued		Amount		par value		earnings			ESOT			stock			Income (Loss)			equity
Balance at December 31, 2016	2,614,506	$	523	$	14,160	$	14,768		$	(763	)	$	(1,551	)	$	(20	)	$	27,117
Net income	-		-		-		1,317			-			-			-			1,317
Retirement benefits adjustment	-		-		-		-			-			-			(12	)		(12	)
Compensation expense	-		-		-		-			101			-			-			101
Purchase of treasury shares	-		-		-		-			-			(195	)					(195	)
Cash dividend	-		-		-		(376	)		-			-			-			(376	)
Stock based compensation net of tax benefit	-		-		11		-			-			202			-			213
Balance at December 31, 2017	2,614,506	$	523	$	14,171	$	15,709		$	(662	)	$	(1,544	)	$	(32	)	$	28,165
Net income	-		-		-		3,498			-			-			-			3,498
Retirement benefits adjustment	-		-		-		-			-			-			67			67
Compensation expense	-		-		-		-			101			-			-			101
Purchase of treasury shares	-		-		-		-			-			(175	)					(175	)
Cash dividend	-		-		-		(413	)		-			-			-			(413	)
Stock based compensation net of tax benefit	-		-		79		(6	)		-			197			-			270
Balance at December  31, 2018	2,614,506	$	523	$	14,250	$	18,788		$	(561	)	$	(1,522	)	$	35		$	31,513

The Company’s Board of Directors authorized the purchase of up to 450,000 shares of its common stock in the open market or in privately negotiated transactions. As of December 31, 2018, the Company has purchased 355,023 shares and there remain 94,977 shares available to purchase under this program. There were 5,693 shares purchased by the Company in 2018.

On January 1, 2018, 28,500 shares of restricted stock vested of which 11,341 shares were withheld and repurchased by the Company for approximately $117,000 to satisfy statutory minimum withholding tax requirements for those participants who elected this option as permitted under the Company’s 2012 Long-Term Incentive Plan.

On May 25, 2018, the Company issued 78,750 shares of restricted stock to Executive Officers and certain key management of the Company under the Company’s 2012 Long-Term Incentive Plan. The restricted share awards have varying vesting periods between January 2019 and January 2021; however, these shares have voting rights and accrue dividends prior to vesting. The accrued dividends are paid upon vesting of the restricted shares. The aggregate amount of expense to the Company, measured based on grant date fair value is expected to be approximately $735,000 and will be recognized over the requisite service period.

On May 25, 2018, the Company revised its director compensation policy pursuant to which non-employee directors receive a portion of their annual retainer in the form of restricted stock under the Company’s 2012 Long-Term Incentive Plan. An aggregate of 4,288 restricted shares were issued that vest quarterly over a twelve month service period. These shares have voting rights and accrue dividends that are paid upon vesting. The aggregate amount of expense to the Company, measured based on the grant date fair value is expected to be approximately $40,000 and will be recognized over the requisite service period.

Included in the year ended December 31, 2018 and 2017 is approximately $276,000 and $213,000, respectively, of stock-based compensation expense related to the restrictive share awards.

On May 18, 2018 the Company announced that its Board of Directors declared a $0.16 per share cash dividend ($0.15 per share cash dividend in 2017). The dividend was subsequently paid on July 16, 2018 to shareholders of record on June 30, 2018 and was approximately $416,000 in the aggregate ($376,000 – 2017). These dividends do not represent that the Company will pay dividends on a regular or scheduled basis. The amount was recorded in dividends payable and as a reduction to retained earnings on the accompanying consolidated balance sheet.

Earnings Per Share

Basic earnings per share is computed by dividing net income by the weighted average number of shares outstanding during the period. The weighted average number of common shares outstanding does not include any potentially dilutive securities or any unvested restricted shares of common stock. These unvested restricted shares, although classified as issued and outstanding, are considered forfeitable until the restrictions lapse and will not be included in the basic EPS calculation until the shares are vested. Diluted earnings per share is computed by dividing net income by the weighted average number of shares outstanding during the period plus the number of shares of common stock that would be issued assuming all contingently issuable shares having a dilutive effect on the earnings per share that were outstanding for the period. The dilutive effect of unvested restrictive stock is determined using the treasury stock method.

	December 31,		December 31,
	2018		2017
	($000's omitted except for per share data)
Net Income	$	3,498	$	1,317
Weighted average common shares outstanding (basic)		2,272		2,267
Unvested restricted stock		81		29
Weighted average common shares outstanding (diluted)		2,353		2,296
Basic
Net income per share	$	1.54	$	0.58
Diluted
Net income per share	$	1.49	$	0.57

Share Based Payments

The Company's 2012 Long-Term Incentive Plan was approved by the shareholders at the 2012 Annual Meeting of Shareholders. This plan authorizes the issuance of up to 300,000 shares. As of December 31, 2018, there is no unrecognized compensation related to the unvested restricted shares vested on January 1, 2019.

A summary of the status of restricted share awards granted under all employee plans is presented below:

			Weighted Average Grant Date
	Shares		Fair Value
Restricted Share Activity:
Unvested at December 31, 2016		83,250	$	8.02
Granted in 2017		-	$	-
Forfeited in 2017		-	$	-
Vested in 2017		54,750	$	8.09
Unvested at December 31, 2017		28,500	$	7.96
Granted in 2018		83,038		9.33
Forfeited in 2018		-		-
Vested in 2018		30,644	$	8.06
Unvested at December 31, 2018		80,894	$	9.33

Shareholders’ Rights Plan

During 2012, the Company’s Board of Directors adopted a shareholders’ rights plan (the “Rights Plan”) and simultaneously declared a dividend distribution of one right for each outstanding share of the Company’s common stock outstanding at October 15, 2012. The Rights Plan replaced a previous shareholders rights plan that was adopted in 2002 and expired on August 28, 2012. The rights do not become exercisable until the earlier of (i) the date of the Company’s public announcement that a person or affiliated group other than Dr. Nicholas D. Trbovich, Kenneth D. Trbovich or the ESOP trust (an “Acquiring Person”) has acquired, or obtained the right to acquire, beneficial ownership of 25% or more of the Company’s common stock (excluding shares held by the ESOP trust) or (ii) ten business days following the commencement of a tender offer that would result in a person or affiliated group becoming an Acquiring Person.

The exercise price of a right has been established at $32.00. Once exercisable, each right would entitle the holder to purchase one one-hundredth of a share of Series A Junior Participating Preferred Stock. In the event that any person becomes an Acquiring Person, each right would entitle any holder other than the Acquiring Person to purchase common stock or other securities of the Company having a value equal to three times the exercise price. The Board of Directors has the discretion in such event to exchange two shares of common stock or two one-hundredths of a share of preferred stock for each right held by any holder other than the Acquiring Person.