Stock-Based Compensation

9 Months Ended

Sep. 30, 2014

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

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

Note 7 - Stock-Based Compensation

As of September 30, 2014, the Company maintained the Shore Bancshares, Inc. 2006 Stock and Incentive Compensation Plan (“2006 Equity Plan”) under which it may issue shares of common stock or grant other equity-based awards. Stock-based awards granted to date generally are time-based, vest in equal installments on each anniversary of the grant date over a three- to five-year period of time, and, in the case of stock options, expire 10 years from the grant date. Stock-based compensation expense is recognized ratably over the requisite service period for all awards, is based on the grant-date fair value and reflects forfeitures as they occur.

The following tables provide information on stock-based compensation expense for the three and nine months ended September 30, 2014 and 2013.

	For the Three Months Ended				For the Nine Months Ended
	September 30,				September 30,
(Dollars in thousands)	2014		2013		2014		2013
Stock-based compensation expense	$	30	$	18	$	79	$	58
Excess tax benefit related to stock-based compensation		-		-		-		26

	September 30,
(Dollars in thousands)	2014		2013
Unrecognized stock-based compensation expense	$	92	$	112
Weighted average period unrecognized expense is expected to be recognized		1.0 years		1.7 years

The following table summarizes restricted stock award activity for the Company under the 2006 Equity Plan for the nine months ended September 30, 2014.

	Number		Weighted Average Grant
	of Shares		Date Fair Value
Nonvested at beginning of period		13,930	$	8.33
Granted		3,654		9.57
Vested		(3,333)		8.93
Cancelled		-		-
Nonvested at end of period		14,251	$	8.51

The fair value of restricted stock awards that vested during the first nine months of 2014 was $30 thousand.

The following table summarizes stock option activity for the Company under the 2006 Equity Plan for the nine months ended September 30, 2014.

			Weighted
	Number		Average
	of Shares		Exercise Price
Outstanding at beginning of period		40,662	$	6.64
Granted		-		-
Exercised		-		-
Expired/Cancelled		-		-
Outstanding at end of period		40,662	$	6.64
Exercisable at end of period		20,331	$	6.64

At the end of the third quarter of 2014, the aggregate intrinsic value of the options outstanding under the 2006 Equity Plan was $96 thousand based on the $9.00 market value per share of the Company’s common stock at September 30, 2014. Similarly, the aggregate intrinsic value of the options exercisable was $48 thousand at September 30, 2014. Since there were no options exercised during the first nine months of 2014 or 2013, there was no intrinsic value associated with stock options exercised and no cash received on exercise of options. At September 30, 2014, the weighted average remaining contract life of options outstanding was 7.5 years.