Employee Benefit Plans

3 Months Ended

Mar. 31, 2022

Defined Benefit Plan [Abstract]

Employee Benefit Plans

Note 8. 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 for the three month periods ending March 31, 2022 and 2021, respectively, was $393 thousand and $288 thousand.    

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 March 31, 2022, the Company had one active equity incentive plan available for future grants, the 2015 Stock Incentive Plan, which has 1,767,518 Rights available for future grants or awards.

In addition, the Company has 33,500 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 status of stock option plans is presented in the following table:

		Weighted
		Average
		Exercisable
	Number	Price
Outstanding at December 31, 2021	79,667	$	10.17
Granted	—		—
Exercised	(27,550)		7.90
Forfeited	—		—
Outstanding at March 31, 2022	52,117	$	11.37

Information pertaining to stock options outstanding at March 31, 2022, 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
$	9.48	15,500	0.95 years	$	9.48	15,500	$	9.48
	9.60	18,000	1.71 years		9.60	18,000		9.60
	11.76	2,266	0.25 years		11.76	2,266		11.76
	15.05	16,351	3.21 years		15.05	16,351		15.05
Outstanding, end of period		52,117	1.89 years	$	11.37	52,117	$	11.37

The Company did not recognize any stock option-based compensation expense during the three months ended March 31, 2022 and 2021, respectively, as all stock options issued are fully vested, and 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 three months ended March 31, 2022 and 2021, was $506 thousand and $192 thousand, respectively.  The aggregate intrinsic value of total options outstanding and exercisable options at March 31, 2022, was $741 thousand. Cash received from options exercised under all share-based payment arrangements for the three months ended March 31, 2022 was $217 thousand.

Stock options of 27,550 and 15,965 shares were exercised during the three month periods ended March 31, 2022, and 2021, respectively.  The income tax benefit recognized for the exercise of options during the three months ended March 31, 2022, and 2021, was a $76 thousand and $1 thousand, respectively.

Restricted Stock Awards:

A summary of the activity of the Company’s unvested restricted stock awards for the period ended March 31, 2022 is presented below:

		Weighted
		Average
		Grant-Date
	Number	Fair Value
Balance at December 31, 2021	144,367	$	19.49
Granted	21,842		26.66
Vested	(4,167)		20.14
Forfeited/expired	—		—
Balance at March 31, 2022	162,042	$	20.44

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 three months ended March 31, 2022 and 2021, was $312 thousand and $201 thousand, respectively. As of March 31, 2022, there was $1.7 million 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 2.20 years. The grant-date fair value of restricted stock awards vested was $84 thousand for the three months ended March 31, 2022.

Stock Appreciation Rights ("SARs"):

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

		Weighted
		Average
	Number	Exercisable Price
Outstanding at December 31, 2021	55,000	$	18.21
Granted	—		—
Exercised	(4,500)		18.12
Forfeited	—		—
Outstanding at March 31, 2022	50,500	$	18.21

Information pertaining to SARs outstanding at March 31, 2022, 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	1.75 years	$	15.19	—	$	—
	18.12	14,500	0.75 years		18.12	14,500		18.12
	20.70	20,000	2.76 years		20.70	—		—
	Outstanding, end of period	50,500	1.86 years	$	18.21	14,500	$	18.12

SARs compensation expense of ($26) thousand and $49 thousand was recognized for the three month periods ended March 31, 2022 and 2021, respectively. The credit in expense for the three month period ended March 31, 2022, was due to adjustments related to the fair value evaluation of SARs.