Employee Benefit Plans

9 Months Ended

Sep. 30, 2023

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 nine-month periods ending September 30, 2023, was $475 thousand and $1.4 million, respectively.  The Company’s contribution to the Plan for the three and nine months ended September 30, 2022, was $419 thousand and $1.3 million, 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 September 30, 2023, the Company had one active equity incentive plan available for future grants, the 2015 Stock Incentive Plan, which has 1,676,663 Rights available for future grants or awards.

The Company’s 2015 Stock Incentive Plan has 11,840 Rights issued. In addition, the Company has 4,500 Rights issued from the Cornerstone Non-Qualified Plan Options, which does 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, 2022	32,045	$	12.04
Granted	—		—
Exercised	(15,705)		10.47
Forfeited	—		—
Outstanding at September 30, 2023	16,340	$	13.55

Information pertaining to stock options outstanding at September 30, 2023, 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
$	9.60	4,500	0.42 years	$	9.60	4,500	$	9.60
	15.05	11,840	2.00 years		15.05	11,840		15.05
Outstanding, end of period		16,340	1.57 years	$	13.55	16,340	$	13.55

The Company did not recognize any stock option-based compensation expense during the three and nine months ended September 30, 2023 and 2022, 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.

No stock options were exercised during the three months ended September 30, 2023.  Stock options of 15,705 shares were exercised during the nine-month period ended September 30, 2023.  Stock options of 603 and 32,003 shares were exercised during the three- and nine-month periods ended September 30, 2022, respectively. The income tax benefit recognized for the exercise of options during the nine months ended September 30, 2023, was a benefit of $60 thousand, and for the three and nine months ended September 30, 2022, was a benefit of $64 thousand and a benefit of $147 thousand, respectively.

No stock options were exercised during the three months ended September 30, 2023. The intrinsic value of options exercised during the nine months ended September 30, 2023, was $242 thousand, and $9 thousand and $565 thousand, during the three and nine months ended September 30, 2022, respectively. The aggregate intrinsic value of total options outstanding and exercisable options at September 30, 2023, was $128 thousand. Cash received from options exercised under all share-based payment arrangements for the nine months ended September 30, 2023, was $165 thousand.

Restricted Stock Awards:

A summary of the activity of the Company’s unvested restricted stock awards for the period ended September 30, 2023, is presented below:

		Weighted
		Average
		Grant-Date
	Number	Fair Value
Balance at December 31, 2022	129,836	$	19.61
Granted	89,582		26.23
Vested	(27,172)		23.39
Forfeited/expired	(9,912)		22.45
Balance at September 30, 2023	182,334	$	22.15

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 nine months ended September 30, 2023, was $271 thousand and $1.2 million, respectively, and was $281 thousand and $991 thousand, during the three and nine months ended September 30, 2022, respectively.  As of September 30, 2023, there was $1.8 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 1.97 years. The grant-date fair value of restricted stock awards vested was $636 thousand for the nine months ended September 30, 2023.

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, 2022	36,000	$	18.25
Granted	—		—
Exercised	(8,000)		15.19
Forfeited	—		—
Outstanding at September 30, 2023	28,000	$	19.13

Information pertaining to SARs outstanding at September 30, 2023, 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	8,000	0.25 years	$	15.19	8,000	$	15.19
	20.70	20,000	1.25 years		20.70	—		—
	Outstanding, end of period	28,000	0.97 years	$	19.13	8,000	$	15.19

SARs compensation expense of $5 thousand and ($118) thousand was recognized for the three and nine months ended September 30, 2023, respectively, and $31 thousand and ($12) thousand for the three and nine months ended September 30, 2022.  The credit adjustment for the nine-month periods ended September 30, 2023, and September 30, 2022, respectively, is related to the fair value evaluation of SARs.