Employee Benefit Plans

6 Months Ended

Jun. 30, 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 and six month periods ending June 30, 2022, was $453 thousand and $847 thousand, respectively.  The Company’s contribution to the Plan for the three and six months ended June 30, 2021, was $350 thousand and $638 thousand, respectively.    

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 June 30, 2022, the Company had one active equity incentive plan available for future grants, the 2015 Stock Incentive Plan, which has 1,766,245 Rights available for future grants or awards.

In addition, the Company has 31,290 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	(31,400)		8.39
Forfeited	—		—
Outstanding at June 30, 2022	48,267	$	11.33

Information pertaining to stock options outstanding at June 30, 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	14,540	0.70 years	$	9.48	14,540	$	9.48
	9.60	16,750	1.44 years		9.60	16,750		9.60
	11.76	2,266	0.00 years		11.76	2,266		11.76
	15.05	14,711	2.93 years		15.05	14,711		15.05
Outstanding, end of period		48,267	1.60 years	$	11.33	48,267	$	11.33

The Company did not recognize any stock option-based compensation expense during the three and six months ended June 30, 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 and six months ended June 30, 2022, was $50 thousand and $555 thousand, and $27 thousand and $220 thousand, during the three and six months ended June 30, 2021, respectively. The aggregate intrinsic value of total options outstanding and exercisable options at June 30, 2022, was $619 thousand. Cash received from options exercised under all share-based payment arrangements for the six months ended June 30, 2022, was $263 thousand.

Stock options of 3,850 and 31,400 shares were exercised during the three and six month periods ended June 30, 2022, respectively.  Stock options of 3,075 and 19,040 shares were exercised during the three and six month periods ended June 30, 2021, respectively. The income tax benefit recognized for the exercise of options during the three and six months ended June 30, 2022, was a benefit of $8 thousand and $84 thousand, respectively, and for the three and six months ended June 30, 2021, was a benefit of $8 thousand and a benefit of $9 thousand, respectively.

Restricted Stock Awards:

A summary of the activity of the Company’s unvested restricted stock awards for the period ended June 30, 2022, is presented below:

		Weighted
		Average
		Grant-Date
	Number	Fair Value
Balance at December 31, 2021	144,367	$	19.49
Granted	23,115		26.57
Vested	(6,646)		22.25
Forfeited/expired	—		—
Balance at June 30, 2022	160,836	$	20.39

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 and six months ended June 30, 2022, was $398 thousand and $710 thousand, respectively, and was $162 thousand and $363 thousand, during the three and six months ended June 30, 2021, respectively. As of June 30, 2022, there was $1.5 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 1.96 years. The grant-date fair value of restricted stock awards vested was $148 thousand for the six months ended June 30, 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	(6,500)		18.12
Forfeited	—		—
Outstanding at June 30, 2022	48,500	$	18.22

Information pertaining to SARs outstanding at June 30, 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	1.50 years	$	15.19	—	$	—
	18.12	12,500	0.50 years		18.12	12,500		18.12
	20.70	20,000	2.51 years		20.70	—		—
	Outstanding, end of period	48,500	1.66 years	$	18.22	12,500	$	18.12

SARs compensation expense of ($17) thousand and ($43) thousand was recognized for the three and six months ended June 30, 2022, respectively, and $64 thousand and $113 thousand for the three and six months ended June 30, 2021.  The credit in expense for the six month period ended June 30, 2022, was due to adjustments related to the fair value evaluation of SARs.