Note 10 - Stock-based Compensation Plans

9 Months Ended

Sep. 30, 2017

Notes to Financial Statements

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

10

. STOCK-BASED COMPENSATION PLANS

The Corporation has a Stock Incentive Plan for a selected group of officers

and an Independent Directors Stock Incentive Plan. In the

first

quarter

2017,

the Corporation awarded

22,312

shares of restricted stock under the Stock Incentive Plan and

8,470

shares of restricted stock under the Independent Directors Stock Incentive Plan. The

2017

restricted stock awards under the Stock Incentive Plan vest ratably over

three

years, and vesting for

one

-half of the

14,897

restricted shares awarded to Executive Officers depends on the Corporation meeting a return on average equity (“ROAE”) target each year. The

2017

restricted stock issued under the Independent Directors Stock Incentive Plan vests over

one

year.

Compensation cost related to restricted stock is recognized based on the market price of the stock at the grant date over the vesting period. Management has estimated restricte

d stock expense in the

first

nine

months of

2017

based on an assumption that the ROAE target for awards to Executive Officers in

2016

and

2017

will

not

be met, resulting in forfeiture of the restricted stock.

A

nnual stock-based compensation for the year ending

December 31, 2017

is estimated to total

$632,000.

If the ROAE targets for awards to Executive Officers in

2016

and

2017

are met or exceeded, total annual stock-based compensation would increase by approximately

$123,000.

Total stock-based compensation expense attributable to restricted stock awards amounted to

$153,000

in the

third

quarter

2017

and

$475,000

in the

nine

-month period ended

September 30, 2017.

Total stock-based compensation expense attributable to restricted stock awards amounted to

$155,000

in the

third

quarter

2016

and

$480,000

in the

nine

-month period ended

September 30, 2016.