Stock-Based Compensation

9 Months Ended

Sep. 30, 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 499,870 shares remained available for grant at September 30, 2022.

The following tables provide information on stock-based compensation expense for the three and nine months ended September 30, 2022 and 2021.

	For Three Months Ended				For the Nine Months Ended
	September 30,				September 30,
(Dollars in thousands)	2022		2021		2022		2021
Stock-based compensation expense	$	175	$	91	$	477	$	287
Excess tax benefits (deficiencies) related to stock-based compensation		(2)		2		43		3

	September 30,
(Dollars in thousands)	2022			2021
Unrecognized stock-based compensation expense	$	298		$	120
Weighted average period unrecognized expense is expected to be recognized		0.4	years		0.3	years

The following table summarizes restricted stock award activity for the Company under the 2016 Equity Plan for the nine months ended September 30, 2022.

	Nine Months Ended September 30, 2022
		Weighted Average
	Number of	Grant Date
	Shares	Fair Value
Nonvested at beginning of period	29,425	$	15.57
Granted	34,184		20.48
Vested	(25,293)		13.43
Forfeited	—		—
Nonvested at end of period	38,316	$	20.09

The fair value of restricted stock awards that vested during the first nine months of 2022 and 2021 was $505 thousand and $268 thousand, respectively.

There were no stock options granted during the nine months ended September 30, 2022 and September 30, 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.