XML 33 R20.htm IDEA: XBRL DOCUMENT
v3.19.1

STOCK-BASED COMPENSATION | 12 Months Ended
--- | ---
Dec. 31, 2018
STOCK-BASED COMPENSATION [Abstract] |
STOCK-BASED COMPENSATION | NOTE 13. STOCK-BASED COMPENSATION At the 2016 annual meeting, stockholders approved the Shore Bancshares, Inc. 2016 Stock and Incentive Plan (“2016 Equity Plan”), replacing the Shore Bancshares, Inc. 2006 Stock and Incentive Plan (“2006 Equity Plan”), which expired on that date. The Company may issue shares of common stock or grant other equity-based awards pursuant to the 2016 Equity Plan. Stock-based awards granted to date generally are time-based, vest in equal installments on each anniversary of the grant date and range over a one- to three-year period of time, and, in the case of stock options, expire 10 years from the grant date. As part of the 2016 Equity Plan, a performance equity incentive award program, known as the “Long-term incentive plan” allows participating officers of the Company to earn incentive awards of performance share/restricted stock units if certain pre-determined targets are achieved at the end of a three-year performance cycle. Stock-based compensation expense based on the grant date fair value is recognized ratably over the requisite service period for all awards and reflects forfeitures as they occur. The 2016 Equity Plan originally reserved 750,000 shares of common stock for grant, and 652,167 shares remained available for grant at December 31, 2018. ﻿ ﻿ ﻿ ﻿ ﻿ ﻿ ﻿ ﻿ ﻿ ﻿ The following tables provide information on stock-based compensation expense for 2018 and 2017. ﻿ ﻿
﻿ |  |  |  |  |  |
﻿ |  | December 31,
﻿(Dollars in thousands) |  | 2018 |  | 2017
﻿Stock-based compensation expense |  | $ | 447 |  | $ | 1,055
﻿Excess tax benefits related to stock-based |  |  |  |  |  |
﻿compensation |  |  | 34 |  |  | 28
﻿ ﻿
﻿ |  |  |  |  |  |  |  |
﻿ |  | December 31,
﻿(Dollars in thousands) |  | 2018 |  | 2017
﻿Unrecognized stock-based compensation |  |  |  |  |  |  |  |
﻿expense |  | $ | 223 |  |  | $ | 801 |
﻿Weighted average period unrecognized |  |  |  |  |  |  |  |
﻿expense is expected to be recognized |  |  | 0.9 | years |  |  | 1.0 | years
﻿ ﻿ The following table summarizes restricted stock award activity for the Company under the 2016 Equity Plan for the two years ended December 31, 2018. ﻿ ﻿
﻿ |  |  |  |  |  |  |  |  |  |  |
﻿ |  | Year Ended December 31, 2018 |  | Year Ended December 31, 2017 |
﻿ |  |  |  | Weighted Average |  |  |  | Weighted Average |
﻿ |  | Number of |  | Grant Date |  | Number of |  | Grant Date |
﻿ |  | Shares |  | Fair Value |  | Shares |  | Fair Value |
﻿Nonvested at beginning of period |  | 15,913 |  | $ | 15.39 |  | 17,066 |  | $ | 11.46 |
﻿Granted |  | 15,826 |  |  | 18.63 |  | 22,927 |  |  | 16.71 |
﻿Vested |  | (31,739) |  |  | 17.05 |  | (24,080) |  |  | 13.86 |
﻿Cancelled |  | - |  |  | - |  | - |  |  | - |
﻿Nonvested at end of period |  | - |  | $ | - |  | 15,913 |  | $ | 15.39 |
The total fair value of restricted stock awards that vested was $585 thousand in 2018 and $334 thousand in 2017. ﻿ Restricted stock units (RSUs) are similar to restricted stock, except the recipient does not receive the stock immediately, but instead receives it upon the terms and conditions of the Company’s long-term incentive plans which are subject to performance milestones achieved at the end of a three-year period. Each RSU cliff vests at the end of the three-year period and entitles the recipient to receive one share of common stock on a specified issuance date. The recipient does not have any stockholder rights, including voting rights, with respect to the shares underlying awarded RSUs until the recipient becomes the holder of those shares. ﻿ During 2018, the Company entered into a long-term incentive program agreement with officers of the Company and its subsidiaries to award RSUs based on a performance metric to be achieved as of December 31, 2020. Assuming the performance metric is achieved, these awards will cliff vest on this date, in which the final number of common shares to be issued will be determined. The range of RSUs which could potentially be awarded at the end of the performance cycle is between 11,194 shares and 44,792 shares, assuming a certain performance metric is met. In addition, two members of the long-term incentive plan from 2018 forfeited their RSUs due to leaving the Company before the end of the vesting period. The table below presents management’s evaluation of the probable number of common stock awards to be issued at the end of the performance cycle. ﻿ During 2017, the Company entered into a long-term incentive program agreement with officers of the Company and its subsidiaries to award RSUs based on a performance metric to be achieved as of December 31, 2019. Assuming the performance metric is achieved, these awards will cliff vest on this date, in which the final number of common shares to be issued will be determined. The range of RSUs which could potentially be awarded at the end of the performance cycle is between 10,712 shares and 42,865 shares, assuming a certain performance metric is met. In addition, two members of the long-term incentive plan from 2017 forfeited their RSUs due to leaving the Company before the end of the vesting period. The table below presents management’s evaluation of the probable number of common stock awards to be issued at the end of the performance cycle. The following table summarizes restricted stock units activity based on management’s evaluation of the probable number of common stock awards to be issued at the end of the performance cycle for the Company under the 2016 Equity Plan for the two years ended December 31, 2018. ﻿ ﻿
﻿ |  |  |  |  |  |  |  |  |  |  |
﻿ |  | Year Ended December 31, 2018 |  | Year Ended December 31, 2017 |
﻿ |  |  |  | Weighted Average |  |  |  | Weighted Average |
﻿ |  | Number of |  | Grant Date |  | Number of |  | Grant Date |
﻿ |  | Shares |  | Fair Value |  | Shares |  | Fair Value |
﻿Outstanding at beginning of period |  | 90,266 |  | $ | 12.08 |  | 46,342 |  | $ | 10.64 |
﻿Granted |  | 11,194 |  |  | 17.36 |  | 43,924 |  |  | 13.59 |
﻿Vested |  | (40,423) |  |  | 9.49 |  | - |  |  | - |
﻿Forfeited |  | (22,475) |  |  | 16.55 |  | - |  |  | - |
﻿Outstanding at end of period |  | 38,562 |  | $ | 14.69 |  | 90,266 |  | $ | 12.08 |
﻿ The fair value of restricted stock units that vested during 2018 and 2017 was $383 thousand and $0, respectively. The following table summarizes stock option activity for the Company under the 2016 Equity Plan for the two years ended December 31, 2018. ﻿
﻿ |  |  |  |  |  |  |  |  |  |  |
﻿ |  | Year Ended December 31, 2018 |  | Year Ended December 31, 2017 |
﻿ |  |  |  | Weighted Average |  |  |  | Weighted Average |
﻿ |  | Number of |  | Exercise |  | Number of |  | Exercise |
﻿ |  | Shares |  | Prices |  | Shares |  | Prices |
﻿Outstanding at beginning of period |  | 62,429 |  | $ | 8.47 |  | 62,086 |  | $ | 8.29 |
﻿Granted |  | - |  |  | - |  | 1,202 |  |  | 16.65 |
﻿Exercised |  | (35,180) |  |  | 7.54 |  | (859) |  |  | 6.64 |
﻿Expired/Cancelled |  | - |  |  | - |  | - |  |  | - |
﻿Outstanding at end of period |  | 27,249 |  | $ | 9.68 |  | 62,429 |  | $ | 8.47 |
﻿ |  |  |  |  |  |  |  |  |  |  |
﻿Exercisable at end of period |  | 27,249 |  | $ | 9.68 |  | 61,828 |  | $ | 8.40 |
There were no stock options granted during 2018. The weighted average fair value of stock options granted during 2017 was $10.99. The Company estimates the fair value of options using the Black-Scholes valuation model with weighted average assumptions for dividend yield, expected volatility, risk-free interest rate and expected lives (in years). The expected dividend yield is calculated by dividing the total expected annual dividend payout by the average stock price. The expected volatility is based on historical volatility of the underlying securities. The risk-free interest rate is based on the Federal Reserve Bank’s constant maturities daily interest rate in effect at grant date. The expected contract life of the options represents the period of time that the Company expects the awards to be outstanding based on historical experience with similar awards. The following weighted average assumptions were used as inputs to the Black-Scholes valuation model for options granted in 2017. ﻿ ﻿
﻿ |  |  |  |  |  |
﻿ |  |  |  | 2017
﻿Dividend yield |  |  |  |  | 0.84 | %
﻿Expected volatility |  |  |  |  | 64.80 | %
﻿Risk-free interest rate |  |  |  |  | 2.42 | %
﻿Expected contract life (in years) |  |  |  |  | 10 years |
﻿ At December 31, 2018, the aggregate intrinsic value of the options outstanding under the 2016 Equity Plan was $132 thousand based on the $14.54. market value per share of Shore Bancshares, Inc.’s common stock at December 31, 2018. Similarly, the aggregate intrinsic value of the options exercisable was $513 thousand at December 31, 2017. The intrinsic value of options exercised during 2018 was $376 thousand based on the $18.22 market value per share of the Company’s common stock at January 31, 2018. The intrinsic value of options exercised in 2017 was $8 thousand based on the $15.89 market value per share of the Company’s common stock at January 30, 2017. At December 31, 2018, the weighted average remaining contract life of options outstanding and exercisable was 6.4 years.

X
- 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. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -URI http://asc.fasb.org/topic&trid=2228938 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 50 -URI http://asc.fasb.org/subtopic&trid=2208855 + Details
Name: | us-gaap_DisclosureOfCompensationRelatedCostsShareBasedPaymentsTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- References No definition available. + Details
Name: | us-gaap_DisclosureOfCompensationRelatedCostsSharebasedPaymentsAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration