Shareholders' Equity

12 Months Ended

Dec. 31, 2021

Shareholders' Equity

Shareholders' Equity

7.    Shareholders’ Equity

	Years Ended December 31, 2020 and 2021
			Accumulated
			Other				Capital in						Total
	Retained		Comprehensive		Common		excess of				Treasury		shareholders'
	Earnings		Income		Stock		par value		ESOT		stock		equity
December 31, 2019	$	21,703	$	(1,121)	$	523	$	14,358	$	(460)	$	(1,471)	$	33,532
Retirement benefits adjustment		—		(235)		—		—		101		—		(134)
Stock based compensation		—		—		—		123		—		216		339
Purchase of treasury shares		—		—		—		—		—		(100)		(100)
Net Income		100		—		—		—		—		—		100
December 31, 2020, as restated	$	21,803	$	(1,356)	$	523	$	14,481	$	(359)	$	(1,355)	$	33,737
Retirement benefits adjustment		—		(2,552)		—		—		101		—		(2,451)
Stock based compensation		—		—		—		19		—		87		106
Purchase of treasury shares		—		—		—		—		—		(81)		(81)
Net Income		4,055		—		—		—		—		—		4,055
December 31, 2021	$	25,858	$	(3,908)	$	523	$	14,500	$	(258)	$	(1,349)	$	35,366

The Company’s Board of Directors authorized the purchase of up to 450,000 shares of its common stock in the open market or in privately negotiated transactions. As of December 31, 2021, the Company has purchased 360,615 shares and there remain 89,385 shares available to purchase under this program. There were no shares purchased by the Company in 2021. On January 1, 2021, 25,250 shares of restricted stock vested of which 9,920 shares were withheld by the Company for approximately $81,000 to satisfy statutory minimum withholding tax requirements for those participants who elected this option as permitted under the Company's 2012 Long-Term Incentive Plan.

On May 25, 2018, the Company issued 78,750 shares of restricted stock to Executive Officers and certain key management of the Company under the Company's 2012 Long-Term Incentive Plan. The restricted share awards have varying vesting periods between January 2019 and January 2021; however, these shares have voting rights and accrue dividends prior to vesting. The accrued dividends are paid upon vesting of the restricted shares. The aggregate amount of expense to the Company, measured based on grant date fair value was approximately $735,000 and has been recognized over the requisite service period.

The Company’s director compensation policy provides that non-employee directors receive a portion of their annual retainer in the form of restricted stock under the Company's 2012 Long-Term Incentive Plan. These shares vest quarterly over a twelve month service period, have voting rights and accrue dividends that are paid upon vesting. The aggregate amount of expense to the Company, measured based on the grant date fair value, will be recognized over the requisite service period. An aggregate of 13,160 restricted shares were issued on May 14, 2021 with a grant date fair value of $100,000.

Included in the years ended December 31, 2021 and 2020 is approximately $106,000 and $339,000, respectively, of stock-based compensation expense related to the restrictive share awards. There is approximately $50,000 of stock based compensation expense related to unvested shares to be recognized in 2022.

Earnings Per Share

Basic earnings per share is computed by dividing net income by the weighted average number of shares outstanding during the period. The weighted average number of common shares outstanding does not include any potentially dilutive securities or any unvested restricted shares of common stock. These unvested restricted shares, although classified as issued and outstanding, are considered forfeitable until the restrictions lapse and will not be included in the basic EPS calculation until the shares are vested. Diluted earnings per share is computed by dividing net income by the weighted average number of shares outstanding during the period plus the number of shares of common stock that would be issued assuming all contingently issuable shares having a dilutive effect on the earnings per share that were outstanding for the period. The dilutive effect of unvested restrictive stock is determined using the treasury stock method.

	December 31,		December 31,
	2021		2020
	($000's omitted except for per share data)
Net Income	$	4,055	$	100
Weighted average common shares outstanding (basic)		2,411		2,366
Unvested restricted stock		7		31
Weighted average common shares outstanding (diluted)		2,418		2,397
Basic
Net income per share	$	1.68	$	0.04
Diluted
Net income per share	$	1.68	$	0.04

Share Based Payments

The Company's 2012 Long-Term Incentive Plan was approved by the shareholders at the 2012 Annual Meeting of Shareholders. This plan authorizes the issuance of up to 300,000 shares. As of December 31, 2021, there is no unrecognized compensation related to the unvested restricted shares vested on January 1, 2021.

A summary of the status of restricted share awards granted under all employee plans is presented below:

		Weighted Average Grant
	Shares	Date Fair Value
Restricted Share Activity:
Unvested at December 31, 2019	54,416	$	9.58
Granted in 2020	11,328	$	8.83
Forfeited in 2020	—		—
Vested in 2020	34,830	$	9.11
Unvested at December 31, 2020	30,914	$	9.24
Granted in 2021	13,160	$	7.60
Forfeited in 2021	—		—
Vested in 2021	37,498	$	8.95
Unvested at December 31, 2021	6,576	$	7.60

Shareholders’ Rights Plan

During 2012, the Company’s Board of Directors adopted a shareholders’ rights plan (the “Rights Plan”) and simultaneously declared a dividend distribution of one right for each outstanding share of the Company’s common stock outstanding at October 15, 2012. The Rights Plan replaced a previous shareholders rights plan that was adopted in 2002 and expired on August 28, 2012. The rights do not become exercisable until the earlier of (i) the date of the Company’s public announcement that a person or affiliated group other than the ESOP trust (an “Acquiring Person”) has acquired, or obtained the right to acquire, beneficial ownership of 25% or more of the Company’s common stock (excluding shares held by the ESOP trust) or (ii) ten business days following the commencement of a tender offer that would result in a person or affiliated group becoming an Acquiring Person.

The exercise price of a right has been established at $32.00. Once exercisable, each right would entitle the holder to purchase one one-hundredth of a share of Series A Junior Participating Preferred Stock. In the event that any person becomes an Acquiring Person, each right would entitle any holder other than the Acquiring Person to purchase common stock or other securities of the Company having a value equal to three times the exercise price. The Board of Directors has the discretion in such event to exchange two shares of common stock or two one-hundredths of a share of preferred stock for each right held by any holder other than the Acquiring Person.