Shareholders' Equity

12 Months Ended

Dec. 31, 2016

Equity [Abstract]

Shareholders' Equity

7. Shareholders’ Equity

	Common Stock
																Accumulated
	Number of shares issued		Amount		Capital in excess of par value		Retained earnings			ESOT			Treasury stock			Other Comprehensive Loss			Total shareholders’ equity
	($000’s omitted except for share data)
Balance at December 31, 2014		2,614,506	$	523	$	14,068	$	9,176		$	(964	)	$	(1,909	)	$	(14	)	$	20,880
Net income		-		-		-		4,597			-			-			-			4,597
Retirement benefits  adjustment		-		-		-		-			-			-			11			11
Compensation expense		-		-		-		-			101			-			-			101
Purchase of treasury shares		-		-		-		-			-			(114	)		-			(114	)
Cash dividend		-		-		-		(375	)		-			-			-			(375	)
Exercise of stock options, net of tax benefit		-		-		-		(3	)		-			7			-			4
Stock based compensation, net of tax benefit		-		-		24		-			-			314			-			338
Balance at December 31, 2015		2,614,506	$	523	$	14,092	$	13,395		$	(863	)	$	(1,702	)	$	(3	)	$	25,442
Net income		-		-		-		1,753			-			-			-			1,753
Retirement benefits adjustment		-		-		-		-			-			-			(17	)		(17	)
Compensation expense		-		-		-		-			100			-			-			100
Purchase of treasury shares		-		-		-		-			-			(275	)		-			(275	)
Cash dividend		-		-		-		(380	)		-			-			-			(380	)
Stock based compensation,  net of tax benefit		-		-		68		-			-			426			-			494
Balance at December 31, 2016		2,614,506	$	523	$	14,160	$	14,768		$	(763	)	$	(1,551	)	$	(20	)	$	27,117

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, 2016, the Company has purchased 345,404 shares and there remain 104,596 shares available to purchase under this program. There were 13,434 shares purchased by the Company in 2016.

On April 18, 2013, the Company issued 165,000 shares of restricted stock to Executive Officers of the Company under the Company's 2012 Long-Term Incentive Plan that was approved by the shareholders at the 2012 Annual Meeting of Shareholders. This plan authorizes the issuance of up to 300,000 shares. The restricted share awards vest over four year periods between January 2014 and January 2017; however, have voting rights and accrue dividends prior to vesting. The aggregate amount of expense to the Company, measured based on grant date fair value is expected to be $1,336,500 and will be recognized over the four year requisite service period.

On April 11, 2016, the Company issued 51,000 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 2017 and January 2018; however, these shares have voting rights and accrue dividends prior to vesting. The aggregate amount of expense to the Company, measured based on grant date fair value is expected to be approximately $406,000 and will be recognized over the requisite service period. During the years ended December 31, 2016 and 2015, there was approximately $479,000 and $361,000, respectively, of compensation expense related to the restrictive share awards.

On January 1, 2016, 41,250 shares of restricted stock vested of which 17,335 shares were withheld and repurchased by the Company for approximately $145,000 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 March 14, 2016, the Company announced that its Board of Directors declared a $0.15 per share cash dividend. The dividend was subsequently paid on May 16, 2016 to shareholders of record on April 11, 2016 and was approximately $380,000 in the aggregate as compared to approximately $375,000 paid in 2015, respectively. These dividends do not represent that the Company will pay dividends on a regular or scheduled basis. The amount is recorded 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.

	Years Ended December 31,
	2016		2015
	($000’s omitted except per share data)
Net income	$	1,753	$	4,597
Weighted average common shares outstanding (basic)		2,215		2,182
Unvested restricted stock		83		82
Weighted average common Shares outstanding (diluted)		2,298		2,264
Basic
Net income per share	$	0.79	$	2.11
Diluted
Net income per share	$	0.76	$	2.03

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, 2016, there is approximately $212,000 of unrecognized compensation related to the unvested restricted shares which is expected to be recognized over the next year.

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

	Shares			Weighted Average Grant Date Fair Value
Restricted Share Activity:
Unvested at December 31, 2014		123,750		$	8.10
Granted in 2015		-
Forfeited in 2015		-
Vested in 2015		41,250		$	8.10
Unvested at December 31, 2015		82,500		$	8.10
Granted in 2016		51,000		$	7.96
Forfeited in 2016		(9,000	)	$	8.03
Vested in 2016		41,250		$	8.10
Unvested at December 31, 2016		83,250		$	8.02

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.