STOCK-BASED COMPENSATION (Tables)

3 Months Ended

Mar. 31, 2013

Schedule of weighted average assumptions

The Company has stock benefit plans that allow the Company to grant options and restricted stock to employees and directors. The awards, which have a term of up to 10 years when issued, vest over a two to five year period. The exercise price of each award equals the market price of the Company's stock on the date of the grant. The fair value of each option grant during the first quarter of 2013 was estimated on the date of grant using the Black-Scholes option-pricing model with the following weighted average assumptions:

Weighted average assumptions
Dividend yield		0.83	%
Expected volatility		17.24	%
Risk-free interest rate		0.67	%
Fair value of options granted during the period	$	3.13
Expected lives in years		5

Option Activity

At March 31, 2013, there was $591,000 of total unrecognized compensation cost, net of estimated forfeitures, related to non-vested awards under the Company's stock option plan. That cost is expected to be recognized over a weighted average period of 16 months. Option activity under the Company's stock option plan for the quarter ended March 31, 2013 was as follows:

	At March 31, 2013
	Number of shares			Weighted average exercise price per share		Weighted average remaining contractual term (in years)		Aggregate intrinsic value ($000)
Outstanding at January 1, 2013		89,279		$	24.08
Options granted		200,000			24.21
Options exercised		—			—
Options forfeited		—			—
Options expired		(14,279	)		24.26
Outstanding at March 31, 2013		275,000		$	24.16		3.29	$	403
Options exercisable at March 31, 2013		67,129		$	24.56		1.82	$	172

Stock based Compensation Expense

The Company issues stock of the Company as payment for director fees as permitted by the 2011 Director Stock Compensation Plan, the cost associated with these grants is included as a component of stock-based compensation. The following tables provide information regarding the Company's stock-based compensation expense:


	For the three months ended March 31,
	2013		2012
	(in thousands)
Stock-based compensation expense
Director fees	$	34	$	37
Stock option expense		59		7
Employee Stock Ownership Plan ("ESOP") expense		73		69
Total stock-based compensation expense	$	166	$	113