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Stock-Based Compensation | 9 Months Ended
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Sep. 30, 2023
Share-Based Payment Arrangement [Abstract] |
Stock-Based Compensation | ) STOCK-BASED COMPENSATION We account for stock-based compensation under the fair value recognition provisions of ASC Topic 718 - Compensation - Stock Compensation. We recognize stock-based compensation cost over the award’s requisite service period on a straight-line basis for time-based restricted stock grants and performance-based restricted stock grants. We record forfeitures as they occur for all stock-based compensation. The following table presents our total stock-based compensation expense:
|  | Three Months Ended September 30, |  | Nine Months Ended September 30,
|  | 2023 |  | 2022 |  | 2023 |  | 2022
Employee stock-based compensation expense |  |  |  |  |  |  |  |
Pre-tax |  | $ | 350 |  |  | $ | 261 |  |  | $ | 738 |  |  | $ | 792 |
Post-tax (1) |  | 277 |  |  | 206 |  |  | 583 |  |  | 626 |
Director stock-based compensation expense |  |  |  |  |  |  |  |
Pre-tax |  | 60 |  |  | 29 |  |  | 115 |  |  | 132 |
Post-tax (1) |  | 47 |  |  | 23 |  |  | 91 |  |  | 104 |
(1) The after tax amounts are determined using the 21% corporate federal tax rate. We had approximately $2,326,000 of unrecognized stock compensation expense at September 30, 2023 related to non-vested stock-based compensation granted, which we expect to recognize over a weighted-average period of approximately 2.1 years. We had approximately $158,000 of unrecognized director stock-based compensation expense at September 30, 2023 related to non-vested director stock-based compensation granted, which we expect to recognize over a weighted-average period of approximately 0.7 years. Restricted stock, restricted stock units and performance stock units Stock-based compensation cost for restricted stock awards, restricted stock units and performance stock units is measured based on the closing fair market value of our common stock on the date of grant, which vest in equal installments over the requisite service period of typically three years. Restricted stock awards granted to non-employee directors vest over a one-year period. Each restricted stock unit and performance stock unit represents our obligation to deliver to the holder one share of common stock upon vesting. Performance stock units vest based on the Company's return on average equity compared to a defined group of peer companies. On the grant date, we issue the target number of performance stock units. They are subject to forfeitures if performance goals are not met. The actual number of performance stock units earned can vary from zero to 150 percent of the target for the 2023, 2022, and 2021 awards. We did not grant shares of restricted common stock during the three months ended September 30, 2023 and 2022. We granted 45,000 and 907,907 shares of restricted common stock during the nine months ended September 30, 2023 and 2022, respectively, which had a weighted-average grant date fair value of $5.25 and $1.97 per share, respectively. Additionally, during the nine month period ended September 30, 2023, the Company granted 262,933 shares of restricted common stock, with a fair value of $4.33, which are contingent upon stockholder approval of an increase in the number of shares of our common stock that may be issued pursuant to the 2020 Omnibus Incentive Plan. Stockholders will vote on this matter at our 2024 annual meeting of stockholders. The following table presents certain information related to the activity of our non-vested restricted common stock grants:
| Number of Restricted Shares |  | Weighted Average Grant Date Fair Value
Outstanding as of December 31, 2022 | 714,239 |  |  | $ | 2.73 |
Granted (1) | 45,000 |  |  | 5.25 |
Less: Forfeited | 130,546 |  |  | 3.16 |
Less: Vested | 181,334 |  |  | 3.25 |
Outstanding as of September 30, 2023 | 447,359 |  |  | $ | 2.64 |
(1) Contingent shares have been excluded from the calculations in the table above. Stock options Stock option fair value was estimated on the grant date using the Black-Scholes-Merton formula. Stock options vest in equal installments over the requisite service period of typically three years. The following weighted-average assumptions were used to value the stock options granted:
| 2023 |  | 2022
Expected annual dividend yield | — | % |  | — | %
Expected volatility | 80.84 | % |  | 49.66 | %
Risk-free interest rate | 3.44 | % |  | 2.92 | %
Expected term | 6 years |  | 6 years
The expected annual dividend yield for our options granted during 2023 and 2022 is based on no dividends being paid in future quarters. The expected volatility is a historical volatility calculated based on the daily closing prices over a period equal to the expected term. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the grant date. Expected term takes into account the three-year graded vesting term and the 10-year contractual term of the option. We did not grant any stock options for the three months ended September 30, 2023 and 2022. We did not grant any stock options for the nine months ended September 30, 2023. We granted 635,643 stock options during the nine months ended September 30, 2022, which had a weighted average grant date fair value of $0.86 per share. Additionally, during the nine months ended September 30, 2023, the Company granted 123,399 stock options, with a fair value of $3.08, which are contingent upon stockholder approval of an increase in the number of shares of our common stock that may be issued pursuant to the 2020 Omnibus Incentive Plan. Stockholders will vote on this matter at our 2024 annual meeting of stockholders. The following table presents certain information related to the activity of our non-vested stock option grants:
| Number of Stock Options |  | Weighted Average Exercise Prices |  | Weighted Average Remaining Contractual Term (years) |  | Aggregate Intrinsic Value
Outstanding as of December 31, 2022 | 1,250,685 |  |  | $ | 3.71 |  |  | 7.66 |  |  | $ | — |
Granted(1) | — |  |  | — |  |  | — |  |  | — |
Less: Forfeited | 40,000 |  |  | 3.46 |  |  | — |  |  | — |
Less: Expired | 161,925 |  |  | 3.05 |  |  | — |  |  | — |
Less: Exercised | 20,000 |  |  | 3.46 |  |  | — |  |  | — |
Outstanding as of September 30, 2023 | 1,028,760 |  |  | $ | 3.83 |  |  | 8.05 |  |  | $ | 4,140 |
Vested as of September 30, 2023(2) | 950,759 |  |  | $ | 4.78 |  |  | 7.81 |  |  | $ | 4,140 |
Exercisable as of September 30, 2023 | 580,568 |  |  | $ | 4.78 |  |  | 7.81 |  |  | $ | 2,001 |
(1) Contingent options have been excluded from the calculations in the table above. (2) The vested shares are calculated based on all vested shares at September 30, 2023, inclusive of those that have since expired. The weighted average exercise prices, weighted-average remaining contractual term and aggregate intrinsic value is calculated based on only vested shares that are outstanding and exercisable at September 30, 2023.

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