Share Based Compensation

6 Months Ended

Jun. 30, 2011

Share Based Compensation [Abstract]

Share Based Compensation

Note 10 – Stock Based Compensation

Stock Options

A summary of stock option transactions for the six months ended June 30, 2011, is as follows:

	Option Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term		Average Intrinsic Value ($000)
Outstanding at December  31, 2010		159,499		$	21.48
Granted		-			-
Exercised		(10,522	)		16.45
Forfeited		(650	)		22.69
Outstanding at June 30, 2011		148,327		$	21.83		4.3	$	75
Exercisable at June 30, 2011		133,077		$	22.40		3.9	$	52

The fair value of options is estimated at the date of grant using the Black-Scholes option pricing model and expensed over the options' vesting period.  As of June 30, 2011, there was $32,000 in total unrecognized compensation expense related to nonvested stock option grants.

Restricted Stock

The Company from time-to-time grants shares of restricted stock to key employees and non-employee directors.  These awards help align the interests of these employees and directors with the interests of the shareholders of the Company by providing economic value directly related to increases in the value of the Company's stock.  The value of the stock awarded is established as the fair market value of the stock at the time of the grant.  The Company recognizes expenses, equal to the total value of such awards, ratably over the vesting period of the stock grants. 

The Company made its second restricted grant to executive officers in the first quarter 2011. These grants cliff vest over a 24 month period. On January 18, 2011, the Company issued 12,830 shares of restricted stock to its six executive officers and four regional executives.

Nonvested restricted stock for the six months ended June 30, 2011 is summarized in the following table. 

Restricted Stock	Shares		Grant date fair value
Nonvested at December 31, 2010		8,712	$	21.36
Granted		12,830		22.77
Vested		-		-
Forfeited		-		-
Nonvested at June 30, 2011		21,542	$	22.19

As of June 30, 2011, there was $265,000 of total unrecognized compensation cost related to nonvested restricted stock granted under the plan.  This cost is expected to be recognized over the next 18 months. 

Starting in 2010, the Company has begun offering its directors an option on director compensation. Their regular monthly retainer could be received as $1,000 per month in cash or $1,250 in immediately vested, but restricted stock. In 2011, monthly meeting fees could also be received as $400 per month in cash or $500 in immediately vested, but restricted stock.  For the first six months of 2011, ten of thirteen directors elected to receive stock in lieu of cash for their retainer and meeting fees. Only outside directors receive board fees. The Company issued 5,476 and 3,032 shares and recognized share based compensation expense of $107,000 and $60,000 during first six months of 2011 and 2010, respectively.