In May 2018, the shareholders approved the 2018 Equity Plan which authorizes the issuance of up to 9,000,000 shares of CVB’s common stock for eligible participants, which include all of the Company’s employees, officers, and directors, and expires in 2028. The plan authorizes the issuance of a variety of types of equity awards, which include incentive stock options, non-qualified stock options, restricted stock awards (“RSAs”), restricted stock units (“RSUs”), and other stock-based awards, including performance-based restricted stock units ("PRSUs"). The 2018 Equity Plan replaced the 2008 Equity Incentive Plan. No further grants will be made under the 2008 Equity Incentive Plan, but shares may continue to be issued under such plan pursuant to grants previously made. As of December 31, 2022, we have 1,386,922 outstanding options, unvested RSAs, RSUs and PRSUs under our Equity Plans.

The Company expensed $273,000, $220,000, and $183,000, for the years ended December 31, 2022, 2021 and 2020, respectively.

The estimated fair value of the options granted during 2022 and prior years was calculated using the Black-Scholes options pricing model. There were 66,000, 64,500 and 217,500 options granted during 2022, 2021 and 2020, respectively. The options will vest, in equal installments, over a five-year period. The fair value of each stock option granted in 2022, 2021 and 2020, was estimated on the date of grant using the following weighted-average assumptions.


	Year Ended December 31,
	2022			2021			2020
Dividend yield		3.0	%		3.6	%		4.0	%
Volatility		27.9	%		29.6	%		27.1	%
Risk-free interest rate		1.2	%		0.4	%		0.4	%
Expected life	10.0 years			5.5 years			5.3 years
Weighted average grant date fair value	$	8.60		$	3.45		$	2.56

The expected volatility is solely based on the daily historical stock price volatility over the expected option life. The expected life of options granted is derived from the output of the option valuation model and represents the period of time an optionee will hold an option before exercising it. The risk-free rate for periods within the contractual life of the option is based on the U.S. Treasury five-year constant maturity yield curve in effect at the time of the grant. In connection with the adoption of ASU 2016-09 in 2017, the Company elected to account for forfeitures as they occur, rather than to estimate forfeitures over the vesting period.

The following table presents option activity under the Company’s stock option plans as of and for the year ended December 31, 2022.


	Number of Stock Options Outstanding			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term		Aggregate Intrinsic Value
	(In thousands)					(In years)		(In thousands)
Outstanding at January 1, 2022		414		$	17.98
Granted		66			22.47
Exercised		(116	)		16.61
Forfeited or expired		(46	)		19.11
Outstanding at December 31, 2022		318		$	19.25		6.78	$	2,067
Vested or expected to vest at December 31, 2022		318		$	19.25		6.78	$	2,067
Exercisable at December 31, 2022		152		$	18.24		5.37	$	1,147

The total intrinsic value of options exercised during the years ended December 31, 2022, 2021 and 2020 was $1.0 million, $262,000 and $144,000, respectively.

As of December 31, 2022, there was a total of $623,000 in unrecognized compensation cost related to nonvested options granted under the Plan. That cost is expected to be recognized over a weighted-average period of approximately 3.4 years. The total fair value of options vested was $203,000, $258,000 and $183,000 during 2022, 2021 and 2020, respectively. Cash received from stock option exercises was $1.9 million, $1.3 million and $232,000, in 2022, 2021 and 2020, respectively.

At December 31, 2022, options for the purchase of 317,820 shares of CVB’s common stock were outstanding under the above plans, of which options to purchase 152,220 shares were exercisable at prices ranging from $12.68 to $24.83.

The Company has a policy of issuing new shares to satisfy share option exercises.

Restricted Stock Awards, Restricted Stock Units and Performance-Based Restricted Stock Units

The Company granted 674,961, 394,884 and 358,464 restricted stock awards during 2022, 2021 and 2020 respectively. The weighted average grant date fair value of RSAs, RSUs and PRSUs granted in 2022, 2021 and 2020 was $22.82 per share, $20.43 per share and $18.20 per share, respectively. These awards will vest, in equal installments, over a period of approximately one to five years.

Compensation cost is recognized over the requisite service period, which is approximately one to five years, and amounted to $7.6 million, $5.0 million and $5.3 million during the years ended December 31, 2022, 2021 and 2020, respectively. Total unrecognized compensation cost related to RSAs and PRSUs was $15.6 million at December 31, 2022.

The table below summarizes activity related to the Company’s non-vested RSAs and PRSUs for the year ended December 31, 2022.


	Shares				Weighted Average Fair Value
	(In thousands)
Nonvested at January 1, 2022		663			$	19.83
Granted		675				22.82
Vested		(198	)			20.59
Forfeited		(71	)			22.22
Nonvested at December 31, 2022		1,069		(1)	$	21.37

(1) Includes 172,313 PRSUs. There are no restricted stock units outstanding.