XML 28 R16.htm IDEA: XBRL DOCUMENT

Employee Benefit Plans

3 Months Ended

Mar. 31, 2021

Defined Benefit Plan [Abstract]

Employee Benefit Plans

Note 8. Employee Benefit Plans

401(k) Plan:

The Company provides a deferred salary reduction plan (“Plan”) under Section 401(k) of the Internal Revenue Code covering substantially all employees. After 90 days of service the Company matches 100% of employee contributions up to 3% of compensation and 50% of employee contributions on the next 2% of compensation. The Company’s contribution to the Plan for the three month periods ending March 31, 2021 and 2020, respectively, was $288 thousand and $251 thousand.

Equity Incentive Plans:

The Compensation Committee of the Company’s Board of Directors may grant or award eligible participants stock options, restricted stock, restricted stock units, stock appreciation rights, and other stock-based awards or any combination of awards (collectively referred to herein as "Rights"). At March 31, 2021, the Company had one active equity incentive plan available for future grants, the 2015 Stock Incentive Plan, which had 21,886 rights issued and 1,834,427 Rights available for future grants or awards.

In addition, the Company has 19,250 Rights issued from the Cornerstone Bancshares, Inc. 2002 Long Term Incentive Plan, 40,250 Rights issued from the Cornerstone Non-Qualified Plan Options, and 2,266 Rights issued from the Capstone Stock Option Plan. These plans do not have any Rights available for future grants or awards.

Stock Options:

A summary of the status of stock option plans is presented in the following table:


				Weighted
				Average
				Exercisable
		Number		Price
Outstanding at December 31, 2020		99,617		$	10.19
Granted		—			—
Exercised		(15,965)			9.24
Forfeited		—			—
Outstanding at March 31, 2021		83,652		$	10.37

The Company did not recognize any stock option-based compensation expense during the three months ended March 31, 2021 and 2020, respectively, as all stock options issued are fully vested.

Information pertaining to stock options outstanding at March 31, 2021, is as follows:


			Options Outstanding							Options Exercisable
					Weighted-
					Average		Weighted-					Weighted-
					Remaining		Average					Average
Exercise			Number		Contractual		Exercise			Number		Exercise
Prices			Outstanding		Life		Price			Exercisable		Price
$	6.60		19,250		0.95 years		$	6.60		19,250		$	6.60
	9.48		18,000		1.95 years			9.48		18,000			9.48
	9.60		22,250		2.75 years			9.60		22,250			9.60
	11.76		2,266		1.25 years			11.76		2,266			11.76
	15.05		21,886		4.28 years			15.05		21,886			15.05
Outstanding, end of period			83,652		2.52 years		$	10.37		83,652		$	10.37

The intrinsic value of options exercised during the three month periods ended March 31, 2021 and 2020, was $192 thousand and $65 thousand, respectively. The aggregate intrinsic value of total options outstanding and exercisable options at March 31, 2021, was $944 thousand. Cash received from options exercised under all share-based payment arrangements for the three month period ended March 31, 2021 was $147 thousand.

No options vested during the periods ended March 31, 2021, and 2020, respectively. The income tax expense/benefit recognized for the exercise of options during the three months ended March 31, 2021 and 2020, was a benefit of $1 thousand and $23 thousand, respectively.

As of March 31, 2021, all options were fully vested and currently no future compensation cost will be recognized related to nonvested stock-based compensation arrangements granted under the Plans.

Restricted Stock Awards:

A summary of the activity of the Company’s unvested restricted stock awards for the period ended March 31, 2021 is presented below:


				Weighted
				Average
				Grant-Date
		Number		Fair Value
Balance at December 31, 2020		100,218		$	19.07
Granted		48,967			20.08
Vested		(3,918)			22.44
Forfeited/expired		—			—
Balance at March 31, 2021		145,267		$	19.32

The Company measures the fair value of restricted stock awards based on the price of the Company’s common stock on the grant date, and compensation expense is recorded over the vesting period. The compensation expense for restricted stock awards during the three months ended March 31, 2021 and 2020, was $201 thousand and $110 thousand, respectively. As of March 31, 2021, there was $1.8 million, respectively, of unrecognized compensation cost related to non-vested restricted stock awards granted under the plan. The cost is expected to be recognized over a weighted average period of 3.19 years. The grant-date fair value of restricted stock awards vested was $88 thousand for the period ended March 31, 2021.

Stock Appreciation Rights ("SARs"):

A summary of the status of SARs plans is presented in the following table:


				Weighted
				Average
		Number		Exercisable Price
Outstanding at December 31, 2020		73,000		$	19.02
Granted		22,000			20.70
Exercised		—			—
Forfeited		—			—
Outstanding at March 31, 2021		95,000		$	19.41

Information pertaining to SARs outstanding at March 31, 2021, is as follows:


			SARs Outstanding							SARs Exercisable
					Weighted-
					Average		Weighted-
					Remaining		Average					Weighted- Average
Exercise			Number		Contractual		Exercise			Number		Exercise
Prices			Outstanding		Life			Price		Exercisable		Price
$	15.19		18,000		2.75 years		$	15.19		—		$	—
	18.12		21,000		1.75 years			18.12		—			—
	20.70		22,000		3.76 years			20.70		—			—
	21.61		34,000		0.75 years			21.61		34,000			21.61
	Outstanding, end of period		95,000		2.05 years		$	19.41		34,000		$	21.61

SARs compensation expense of $49 thousand and ($118) thousand was recognized for the three month periods ended March 31, 2021 and 2020, respectively. The credit in expense for the three month period ended March 31, 2020, was due to adjustments related to the fair value evaluation of SARs.