SHARE-BASED COMPENSATION PLANS

3 Months Ended

Mar. 31, 2017

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

The Company maintains share-based compensation plans under the shareholder-approved 2011 Plan. The purpose of the share-based compensation plans is to provide officers, employees, and non-employee members of the Board of Directors of the Company with additional incentive to further the success of the Company. Under the 2011 Plan, 381,920 shares of the common stock of the Company were reserved to be issued. At March 31, 2017, 92,966 shares were available to be issued under the 2011 Plan.

2011 Plan incentive awards may consist of grants of incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock, deferred stock units and performance shares. All employees of the Company and its present or future subsidiaries, and members of the Board of Directors of the Company or any subsidiary of the Company, are eligible to participate in the 2011 Plan. The Plan allows for the Compensation Committee of the Board of Directors to determine the type of incentive to be awarded, its term, manner of exercise, vesting of awards and restrictions on shares. Generally, awards are nonqualified under the IRC, unless the awards are deemed to be incentive awards to employees at the Compensation Committee’s discretion.

The following table presents a summary of nonvested restricted shares activity for the three months ended March 31, 2017.



	Shares		Weighted Average Grant Date Fair Value

Nonvested shares, beginning of year	227,337		$	16.88
Granted	50,253		22.35
Forfeited	(6,268	)	17.78
Nonvested shares, at period end	271,322		$	17.88

For the three months ended March 31, 2017 and 2016, $296,000 and $237,000 was recognized as expense on the restricted stock awards, with tax benefits recorded of $101,000 and $83,000 for the respective periods. As of March 31, 2017 and December 31, 2016, the unrecognized compensation expense related to the stock awards totaled $2,762,000 and $2,169,000. The unrecognized compensation expense at March 31, 2017 is expected to be recognized over a weighted-average period of 2.4 years.

The following table presents a summary of outstanding stock options activity for the three months ended March 31, 2017.



	Shares		Weighted Average Exercise Price

Outstanding at beginning of year	80,370		$	27.37
Forfeited	(100	)	21.14
Options outstanding and exercisable, at period end	80,270		$	27.38

The exercise price of each option equals the market price of the Company’s stock on the grant date. An option’s maximum term is ten years. All options are fully vested upon issuance.

The following table presents information pertaining to options outstanding and exercisable at March 31, 2017.



Range of Exercise Prices	Number Outstanding	Weighted Average Remaining Contractual Life (Years)	Weighted Average Exercise Price

$21.14 - $24.99	34,899	3.08	$	21.47
$25.00 - $29.99	2,792	3.01	25.76
$30.00 - $34.99	35,231	0.68	31.34
$35.00 - $37.59	7,348	2.31	37.08
$21.14 - $37.59	80,270	1.95	$	27.38

Outstanding and exercisable options had an intrinsic value of $38,000 at March 31, 2017 and $39,000 at December 31, 2016.

The Company maintains an employee stock purchase plan to provide employees of the Company an opportunity to purchase Company common stock. Eligible employees may purchase shares in an amount that does not exceed 10% of their annual salary, at the lower of 95% of the fair market value of the shares on the semi-annual offering date or related purchase date. The Company reserved 350,000 shares of its common stock to be issued under the employee stock purchase plan. At March 31, 2017, 182,890 shares were available to be issued. For the three months ended March 31, 2017 and 2016, employees purchased 3,114 and 2,461 shares at a weighted average price of $19.71 and $16.57. For the three months ended March 31, 2017 and 2016, compensation expense recognized on the employee stock purchase plan totaled $7,000 and $3,000.

The Company issues new shares or treasury shares, depending on market conditions, in its share-based compensation plan awards.

- Definition

The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details.

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