STOCK OPTIONS

The Company’s 2015 Equity Incentive Plan (“Stock Option Plan” or the “Plan”) executed April 15, 2015, which is shareholder-approved, amended and restated the Company’s 2014 Stock Option Plan (“Original Plan”). The maximum number of shares of common stock that may be issued pursuant to stock-based awards under the Plan equals 1,000,000 shares, all of which may be subject to incentive stock option treatment. Option awards are generally granted with an exercise price equal to the market price of the Company’s common stock at the date of grant. Currently outstanding option awards have vesting periods ranging from 5 to 10 years and have 10-year contractual terms.

The fair value of each option award is estimated on the date of grant using a closed form option valuation (Black-Scholes) model that uses the assumptions noted in the table below. Expected volatilities are based on historical volatilities of the Company’s common stock and similar peer group averages. The Company uses historical data to estimate option exercise and post-vesting termination behavior. The expected term of options granted is based on historical data and represents the period of time that options granted are expected to be outstanding, which takes in to account that the options are not transferable. The risk-free interest rate for the expected term of the option is based on U.S. Treasury yield curve in effect at the time of the grant.

A summary of activity in the Plan during the three months ended March 31, 2017 and 2016 follows:



Three Months Ended March 31, 2017	Number of Shares		Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Life in Years	Aggregate Intrinsic Value
Outstanding at beginning of year	340,377		$	23.43	7.34	$	194
Granted	9,000		26.00		9.96	—
Exercised	(2,010	)	11.94		3.08	28
Forfeited	(1,000	)	24.00		5.55	2
Balance, March 31, 2017	346,367		$	23.56	7.19	$	844

Exercisable at end of period	92,667		$	22.91	6.46	$	287



Three Months Ended March 31, 2016	Number of Shares		Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Life in Years	Aggregate Intrinsic Value
Outstanding at beginning of year	314,391		$	23.28	8.00	$	225
Granted	21,000		23.00		8.79	21
Forfeited	(10,400	)	23.23		7.74	8
Balance, March 31, 2016	324,991		$	23.27	7.86	$	238

Exercisable at end of period	47,191		$	20.83	6.51	$	149

A summary of nonvested activity in the Plan during the three months ended March 31, 2017 and 2016 follows:



Three Months Ended March 31, 2017	Number of Shares		Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Life in Years	Aggregate Intrinsic Value
Outstanding at beginning of year	250,700		$	23.73	7.65	$	69
Granted	9,000		26.00		9.96	—
Vested	(6,000	)	23.90		9.15	13
Balance, March 31, 2017	253,700		$	23.80	7.46	$	557



Three Months Ended March 31, 2016	Number of Shares		Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Life in Years	Aggregate Intrinsic Value
Outstanding at beginning of year	267,200		$	23.72	8.22	$	—
Granted	21,000		23.00		8.79	21
Vested	(10,400	)	23.23		7.47	8
Balance, March 31, 2016	277,800		$	23.68	8.09	$	89

Information related to the Plan is as follows for the three months ended:



	March 31, 2017
Intrinsic value of options exercised	$	28
Cash received from options exercised	24
Tax benefit realized from options exercised	—
Weighted average fair value of options granted	4.30

As of March 31, 2017, there was $995 of total unrecognized compensation cost related to nonvested stock options granted under the Plan. The cost is expected to be recognized over a weighted-average period of 4.63 years.

The Company granted options under the 2015 Stock Option Plan in 2016 and 2017. Expense of $60 and $39 was recorded during the three months ended March 31, 2017 and 2016, respectively.