Employee Benefit Plans

12 Months Ended

Dec. 31, 2021

Defined Benefit Plan [Abstract]

Employee Benefit Plans

Note 13. Employee Benefit Plans

401(k) Plan:

The Company provides a deferred salary reduction plan (“Plan”) under Section 401(k) of the Internal Revenue Code covering substantially all employees. After 90 days of service the Company matches 100% of employee contributions up to 3% of compensation and 50% of employee contributions on the next 2% of compensation. The Company’s contribution to the Plan was $1.3 million in 2021 and $1.1 million in 2020.

Equity Incentive Plans:

The Compensation Committee of the Company’s Board of Directors may grant or award eligible participants stock options, restricted stock, restricted stock units, stock appreciation rights, and other stock-based awards or any combination of awards (collectively referred to herein as "Rights").  At December 31, 2021, the Company had one active equity incentive plan available for future grants, the 2015 Stock Incentive Plan, which has 1,830,260 Rights available for future grants or awards.

The Company’s 2015 Stock Incentive Plan has 18,401 Rights issued.  In addition, the Company has 19,250 Rights issued from the Cornerstone Bancshares, Inc. 2002 Long Term Incentive Plan, 39,750 Rights issued from the Cornerstone Non-

Qualified Plan Options, and 2,266 Rights issued from the Capstone Stock Option Plan. These plans do not have any Rights available for future grants or awards.

Stock Options:

A summary of the activity in these stock option plans is presented in the following table:

		Weighted
		Average
		Exercisable
	Number	Price
Outstanding at December 31, 2019	136,658	$	10.29
Granted	—		—
Exercised	(33,556)		10.12
Forfeited	(3,485)		15.05
Outstanding at December 31, 2020	99,617		10.19
Granted	—		—
Exercised	(19,950)		10.26
Forfeited	—		—
Outstanding at December 31, 2021	79,667		10.17

Information pertaining to options outstanding at December 31, 2021, is as follows:

		Options Outstanding				Options Exercisable
			Weighted-
			Average	Weighted-			Weighted-
			Remaining	Average			Average
Exercise		Number	Contractual	Exercise		Number	Exercise
Prices		Outstanding	Life	Price		Exercisable	Price
$	6.60	19,250	0.19 years	$	6.60	19,250	$	6.60
	9.48	18,000	1.19 years		9.48	18,000		9.48
	9.60	21,750	1.99 years		9.60	21,750		9.60
	11.76	2,266	0.50 years		11.76	2,266		11.76
	15.05	18,401	3.49 years		15.05	18,401		15.05
Outstanding, end of period		79,667	1.68 years	$	10.17	79,667	$	10.17

The Company did not recognize any stock option-based compensation expense for the year ended December 31, 2021, and 2020, respectively, as all stock options are fully vested.  As of December 31, 2021, all options were fully vested and currently no future compensation cost will be recognized related to nonvested stock-based compensation arrangements granted under the Plans.

The intrinsic value of options exercised during the year ended December 31, 2021 and 2020 was $233 thousand and $190 thousand, respectively. The aggregate intrinsic value of total options outstanding and exercisable options at December 31, 2021, was $1.4 million. Cash received from options exercised under all share-based payment arrangements for the period ended December 31, 2021, was $205 thousand.

No options vested during the year ended December 31, 2021, and 2020, respectively. The income tax benefit recognized for the exercise of options during the periods ended December 31, 2021 and 2020 was $13 thousand and $18 thousand, respectively.

Restricted Stock Awards:

A summary of the activity of the Company’s unvested restricted stock awards for the year ended December 31, 2021 is presented below:

The following table summarizes activity relating to non-vested restricted stock awards:

		Weighted
		Average
		Grant-Date
	Number	Fair Value
Balance at December 31, 2020	100,218	$	19.07
Granted	53,134		20.43
Vested	(7,185)		21.42
Forfeited/expired	(1,800)		16.37
Balance at December 31, 2021	144,367	$	19.49

The Company measures the fair value of restricted stock awards based on the price of the Company’s common stock on the grant date, and compensation expense is recorded over the vesting period. The compensation expense for restricted stock awards during the year ended December 31, 2021 and 2020, was $693 thousand and $482 thousand, respectively. As of December 31, 2021, there was $1.4 million, respectively, of unrecognized compensation cost related to non-vested restricted stock awards granted under the plan. The cost is expected to be recognized over a weighted average period of 2.46 years. The grant-date fair value of restricted stock awards vested was $154 thousand for the year ended December 31, 2021.

Stock Appreciation Rights ("SARs"):

When SAR’s are issued, they are assigned an exercisable price based on the closing stock price on the date of grant.  The SAR’s are recorded at fair market value and adjusted through salaries and employee benefits expense.  The SAR’s will be settled through cash based on the difference of Company’s closing stock price on exercise date and original grant date stock price.  SARs compensation expense of $256 thousand and $51 thousand was recognized for the years ended December 31, 2021, and 2020, respectively.

A summary of the status of SARs plans is presented in the following table:

		Weighted
		Average
	Number	Exercisable Price
Outstanding at December 31, 2019	67,000	$	20.54
Granted	18,000		15.19
Exercised	—		—
Forfeited/Expired	(12,000)		21.72
Outstanding at December 31, 2020	73,000		19.02
Granted	22,000		20.70
Exercised	(34,000)		21.61
Forfeited/Expired	(6,000)		18.00

Outstanding at December 31, 2021 55,000 $ 18.21

Information pertaining to SARs outstanding at December 31, 2021, is as follows:

		SARs Outstanding				SARs Exercisable
			Weighted-
			Average	Weighted-
			Remaining	Average			Weighted- Average
Exercise		Number	Contractual	Exercise		Number	Exercise
Prices		Outstanding	Life		Price	Exercisable	Price
$	15.19	16,000	2.00 years	$	15.19	—	$	—
	18.12	19,000	1.00 years		18.12	—		—
	20.70	20,000	3.00 years		20.70	—		—
	Outstanding, end of period	55,000	2.02 years	$	18.21	—	$	—