Stock-Based Compensation

3 Months Ended

Mar. 31, 2022

Stock-Based Compensation [Abstract]

Stock-Based Compensation

Note 11 - Stock-Based Compensation

At the 2016 annual meeting, stockholders approved the Shore Bancshares, Inc. 2016 Stock and Incentive Plan (“2016 Equity Plan”), replacing the Shore Bancshares, Inc. 2006 Stock and Incentive Plan (“2006 Equity Plan”), which expired on that date. The Company may issue shares of common stock or grant other equity-based awards pursuant to the 2016 Equity Plan. Stock-based awards granted to date generally are time-based, vest in equal installments on each anniversary of the grant date and range over a one- to five-year period of time, and, in the case of stock options, expire 10 years from the grant date. As part of the 2016 Equity Plan, a performance equity incentive award program, known as the “Long-term incentive plan” allows participating officers of the Company to earn incentive awards of performance share/restricted stock units if certain pre-determined targets are achieved at the end of a three-year performance cycle. Stock-based compensation expense based on the grant date fair value is recognized ratably over the requisite service period for all awards and reflects forfeitures as they occur. The 2016 Equity Plan originally reserved 750,000 shares of common stock for grant, and 546,217 shares remained available for grant at March 31, 2022.

The following tables provide information on stock-based compensation expense for the three months ended March 31, 2022 and 2021.

	For Three Months Ended
	March 31,
(Dollars in thousands)	2022		2021
Stock-based compensation expense	$	130	$	97
Excess tax benefits related to stock-based compensation		43		3

	March 31,
(Dollars in thousands)	2022			2021
Unrecognized stock-based compensation expense	$	633		$	329
Weighted average period unrecognized expense is expected to be recognized		0.9	years		0.8	years

The following table summarizes restricted stock award activity for the Company under the 2016 Equity Plan for the three months ended March 31, 2022.

	Three Months Ended March 31, 2022
		Weighted Average
	Number of	Grant Date
	Shares	Fair Value
Nonvested at beginning of period	29,425	$	15.57
Granted	33,605		20.49
Vested	(24,626)		13.51
Forfeited	—		—
Nonvested at end of period	38,404	$	19.92

The fair value of restricted stock awards that vested during the first three months of 2022 and 2021 was $492 thousand and $230 thousand, respectively.

There were no stock options granted during the three months ended March 31, 2022 and March 31, 2021. All of the Company’s previously issued stock options that were outstanding on January 1, 2021 were either exercised or expired prior to December 31, 2021.