Share-Based Compensation

9 Months Ended

Sep. 30, 2013

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Share-Based Compensation

 Share-Based Compensation

A broad-based stock incentive plan, the 2006 Stock Incentive Plan, was adopted by the Corporation’s shareholders on April 18, 2006 and was amended and restated on May 2, 2012. Awards granted under this Plan as of September 30, 2013 were stock options granted in 2007, 2008, 2009, 2012 and 2013 and long-term restricted shares issued in 2010, 2011, and 2012. In addition, the Corporation has nonqualified stock option agreements outside of the 2006 Stock Incentive Plan. Grants under the nonqualified stock option agreements were made from 2005 to 2007.

Stock Options

During the nine months ended September 30, 2013, the Corporation granted 137,363 stock options to certain employees. All outstanding stock options were granted at an excercise price equal to the fair market value of the common stock on the date of grant. The maximum option term is ten years and the options generally vest over three years as follows: one-third after one year from the grant date, two-thirds after two years and completely after three years.

The Corporation recognizes compensation expense for awards with graded vesting schedule on a straight-line basis over the requisite service period for the entire award. The expense recorded for stock options was $52, and $9 for the nine months ended September 30, 2013 and 2012, respectively.

The following table summarizes the Corporation's stock options outstanding at September 30, 2013:

	Outstanding		Exercisable
	Number	Weighted Average Remaining Contractual Life (Years)	Number	Weighted Average Exercise Price
Range of Exercise Prices
$5.34-$5.39	37,500	8.16	14,167	$	5.38
$9.07-$9.56	137,363	9.66	—	—
$14.47	82,000	4.35	82,000	14.47
$15.35-$16.50	52,500	3.46	52,500	15.78
$19.10	30,000	2.34	30,000	19.10
$19.17	30,000	1.34	30,000	19.17
Outstanding at end of period	369,363	5.39	208,667	16.12

A summary of the status of stock options at September 30, 2013 and 2012 is presented in the table below:

	2013		2012
	Options	Weighted Average Exercise Price per Share	Options	Weighted Average Exercise Price per Share
Outstanding at beginning of period	232,000	14.50	197,000	16.12
Granted	137,363	9.18	35,000	$5.39
Forfeited or expired	—	—	—	—
Exercised	—	—	—	—
Stock dividend or split	—	—	—	—
Outstanding at end of period	369,363	12.52	232,000	14.50
Exercisable at end of period	208,667	15.52	197,000	16.12

There were no options exercised during the nine months of 2013 therefore the total intrinsic value of options exercised was $0. The aggregate intrinsic value represents the total pre-tax intrinsic value (the difference between the Corporation’s closing stock price on the last trading day of the third quarter of 2013 and the exercise price, multiplied by the number of in-the-money options). The Corporation’s closing stock price on September 30, 2013 was $9.40.

For the third quarter 2013, the per share weighted-average fair value of stock options granted was $2.35 compared to $0 for the third quarter 2012. The per share weighted-average fair value of stock options granted during the nine months of 2013 and 2012 was $2.15 and $1.22, respectively on the date of grant using the Black-Scholes option-pricing model with the following weighted average assumptions:

	Three Months Ended September 30,				Nine Months Ended September 30
	2013		2012		2013		2012
Dividend Yield	3.03	%	—	%	3.07	%	3.38	%
Expected volatility	32.54	%	—	%	32.60	%	33.00	%
Risk-free interest rate	1.98	%	—	%	1.37	%	1.27	%

Restricted Shares

The Corporation did not issue long term restricted shares during the nine months ended September 30, 2013. In 2012, the Corporation issued 62,105 shares of long-term restricted shares. The market price of the Corporation’s common shares on the date of grant of the long-term restricted stock was $5.39 per share. Shares of long-term restricted stock generally vest in two equal installments on the second and third anniversaries of the date of grant, or upon the earlier death or disability of the recipient or a qualified change of control of the Corporation. The expense recorded for long-term restricted stock for the nine months ended September 30, 2013 and 2012 was $173, and $220 respectively.

The market price of the Corporation’s common shares at the date of grant is used to estimate the fair value of restricted stock awards. A summary of the status of restricted shares at September 30, 2013 is presented in the table below:

	Nonvested Shares		Weighted Average Grant Date Fair Value
Nonvested at January 1, 2013	143,031		$	5.07
Granted	—		—
Vested	(52,499	)	4.68
Forfeited or expired	—		—
Nonvested at September 30, 2013	90,532		5.29

Stock Appreciation Rights (“SARS”)

In 2006, the Corporation issued an aggregate of 30,000 SARS at $19.00 per share, 15,500 of which have expired due to employee terminations. The SARS vest over three years as follows: one-third after one year from the grant date, two-thirds after two years and completely after three years. Any unexercised portion of the SARS shall expire at the end of the stated term which is specified at the date of grant and shall not exceed ten years. The SARS issued in 2006 will expire in January 2016. The expense recorded for SARS for the nine months ended September 30, 2013, was $10 and for 2012 was $2.