Share-Based Compensation

9 Months Ended

Sep. 30, 2011

Share-Based Compensation

Share-Based Compensation

Note 2.  Share-Based Compensation

For the nine month periods ended September 30, 2011 and 2010, share-based compensation cost recognized was $149,000 and $172,000, respectively.  For the quarter ended September 30, 2011 and 2010, share-based compensation cost recognized for stock option compensation was $47,000 and $59,000, respectively.  The recognized tax benefit for stock option compensation expense was $27,000 and $31,000, for the nine month periods ended September 30, 2011 and 2010, respectively.  For the three month periods ended September 30, 2011 and 2010, recognized tax benefits were $9,000 and $5,000, respectively.

The Company bases the fair value of the options granted on the date of grant using a Black-Scholes Merton option pricing model that uses assumptions based on expected option life and the level of estimated forfeitures, expected stock volatility, risk free interest rate, and dividend yield.  The expected term of the Company’s options was determined under the applicable guidance for estimating expected term of options.  Stock volatility is based on the historical volatility of the Company’s stock.  The risk-free rate is based on the U. S. Treasury yield curve for the periods within the contractual life of the options in effect at the time of grant.  The compensation cost for options granted is based on the weighted average grant date fair value per share.

No options to purchase shares of the Company’s common stock were issued in the first nine months of 2011 from any of the Company’s stock based compensation plans.  In the same period of 2010, options to purchase 67,800 shares of the Company’s common stock were issued from the Central Valley Community Bancorp 2005 Omnibus Incentive Plan and 15,200 were issued from the Central Valley Community Bancorp 2000 Stock Option Plan.  All options were issued at an exercise price equal to the fair market value at the grant date.

A summary of the combined activity of the Company’s Stock Based Compensation Plans for the nine month period ended September 30, 2011 follows:

	Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (Years)	Aggregate Intrinsic Value
Options outstanding at January 1, 2011	707,129		7.31
Options exercised	(179,800	)	$	3.78
Options canceled	(16,000	)	$	6.96
Options outstanding at September 30, 2011	511,329		$	8.56	4.17	$	17
Options vested or expected to vest at September 30, 2011	494,952		$	8.63	5.70	$	17
Options exercisable September 30, 2011	418,405		$	9.14	3.30	$	14

The weighted-average grant-date fair value of options granted in the nine month period ended September 30, 2010 was $2.59.

The total intrinsic value of 179,800 options exercised in the nine months ended September 30, 2011 was $417,000. The total intrinsic value of 159,400 options exercised in the nine months ended September 30, 2010 was $349,000.

Cash received from options exercised for the nine months ended September 30, 2011 was $680,000.  The actual tax benefit realized for the tax deductions from options exercised totaled $117,000 for nine months ended September 30, 2011.

As of September 30, 2011, there was $244,000 of total unrecognized compensation cost related to non-vested share-based compensation arrangements granted under all plans.  The cost is expected to be recognized over a weighted average period of 2.77 years.