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STOCK-BASED COMPENSATION PLANS

12 Months Ended

Dec. 31, 2021

NOTE 13. STOCK-BASED COMPENSATION PLANS

The Company has several stock-based compensation plans that allow for grants of restricted stock, restricted shares, performance share units, performance shares and restricted stock units to its employees and non-employee directors. The Company's stock-based compensation plans are administered by the Compensation Committee of the Board of Directors. For the years ended December 31, 2021, 2020 and 2019, all common stock issuances in connection with stock-based compensation arrangements were issued from unissued shares. As of December 31, 2021, total shares authorized under the Company's stock-based compensation 2019 plan for employees and directors were 500,000 shares, of which 226,286 shares were available for future grants.

Compensation expense recognized in connection with the stock-based compensation plans are presented in the following table for the years ended December 31, 2021, 2020, and 2019:


(in thousands)	2021		2020		2019
Stock options	$	—	$	12	$	28
Restricted stock awards		357		275		300
Performance stock units		317		225		182
Restricted stock units		1,391		960		841
Total compensation expense	$	2,065	$	1,472	$	1,351

Tax benefits recognized from stock-based compensation plans for the years ended December 31, 2021, 2020, and 2019 are, as follows:


(in thousands)	2021		2020		2019
Stock options⁽¹⁾	$	77	$	9	$	23
Restricted stock awards		84		65		72
Performance stock units		79		49		56
Restricted stock units		344		190		198
Total tax benefit	$	584	$	313	$	349

⁽¹⁾ The Company does not receive a tax benefit on this plan until disqualifying dispositions are made.

Stock Options

A summary of stock options as of December 31, 2021 and 2020, and changes during the year then ended is presented below:


	Number of	Weighted		Aggregate
	Stock Options	Average		Intrinsic Value
Stock Options	Outstanding	Exercise Price		(in thousands)
Outstanding at January 1, 2021	94,566	$	20.29
Granted	—		—
Exercised	(36,441)		19.38
Forfeited	—		—
Expired	(161)		13.27
Outstanding at December 31, 2021	57,964	$	20.89	$	466

Ending vested and expected to vest December 31, 2021	57,964	$	20.89	$	466
Exercisable at December 31, 2021	57,962		20.89		466


	Number of	Weighted		Aggregate
	Stock Options	Average		Intrinsic Value
Stock Options	Outstanding	Exercise Price		(in thousands)
Outstanding at January 1, 2020	107,784	$	20.15
Granted	—		—
Exercised	(9,860)		18.42
Forfeited	(483)		16.96
Expired	(2,875)		21.90
Outstanding at December 31, 2020	94,566	$	20.29	$	226

Ending vested and expected to vest December 31, 2020	94,566	$	20.29	$	226
Exercisable at December 31, 2020	92,956		20.35		217

All outstanding options were fully vested with no unrecognized compensation cost as of December 31, 2021. The intrinsic value of the options exercised for the years ended December 31, 2021, 2020, and 2019, was approximately $331 thousand, $39 thousand and $94 thousand, respectively. The weighted average remaining contractual term of outstanding options is approximately 3.2 years.

Restricted Stock Awards

Restricted stock awards (RSAs) are granted to certain directors and executive officers and vest immediately. A summary of RSAs as of December 31, 2021 and 2020, and changes during the year then ended is presented below:


	Number of
	Restricted Stock	Weighted Average
	Awards	Grant Date Fair
Restricted Stock Awards	Outstanding	Value
Outstanding at January 1, 2021	—	$	—
Awarded	11,418		31.29
Vested	(11,418)		31.29
Forfeited	—		—
Outstanding at December 31, 2021	—	$	—



	Number of
	Restricted Stock	Weighted Average
	Awards	Grant Date Fair
Restricted Stock Awards	Outstanding	Value
Outstanding at January 1, 2020	—	$	—
Awarded	39,565		23.59
Vested	(39,565)		23.59
Forfeited	—		—
Outstanding at December 31, 2020	—	$	—

As RSAs are granted and vest on the same day there is no remaining contractual maturity or unrecognized expense to report as of December 31, 2021. As there is no exercise price, RSAs also have no intrinsic value as of December 31, 2021.

Performance Stock Units

The Company has a long-term incentive plan where performance unit awards (PSUs) are granted to certain executive officers providing the opportunity to earn shares of common stock of the Company based on its performance compared to peers. Participants in the plan were collectively granted PSUs ranging from zero to 49,625 in 2021 and from zero to 37,562 in 2020. The PSUs granted will vest only if the performance measures are achieved over a three year performance period. Failure to achieve the performance measures will result in all or a portion of shares being forfeited. On the grant dates in 2021 and 2020, PSUs had a weighted average fair value per share of $23.18 and $25.07, respectively. Expense is recognized over the performance period and is adjusted for changes in probability of the Company achieving profitability metrics.

The following table summarizes performance units at target as of December 31, 2021 and 2020:


	Number of	Weighted Average
	Performance Stock	Grant Date Fair
Performance Stock Units	Units Outstanding	Value
Nonvested at January 1, 2021	56,328	$	24.98
Awarded	33,083		23.18
Vested and exercised	(7,694)		26.79
Forfeited	(11,252)		25.33
Nonvested at December 31, 2021	70,465	$	23.88


	Number of	Weighted Average
	Performance Stock	Grant Date Fair
Performance Stock Units	Units Outstanding	Value
Nonvested at January 1, 2020	43,058	$	26.01
Awarded	25,041		25.07
Vested and exercised	(10,369)		18.51
Forfeited	(1,402)		29.13
Nonvested at December 31, 2020	56,328	$	24.98

Unrecognized expense for non-vested PSUs totaled $445 thousand as of December 31, 2021, which is expected to be recognized over the weighted average remaining contractual maturity term of 2.0 years. PSU’s do not carry an exercise price and therefore have no intrinsic value as of December 31, 2021.

Restricted Stock Units

During 2021 and 2020, restricted stock units (RSUs) were granted to certain executive officers and senior vice presidents. Awards to executives vest annually over 3 years while awards to senior vice presidents cliff vest at the end of three years. The RSUs granted were valued between $22.51 and $28.93 for 2021 and between $20.44 and $25.07 for 2020 the fair value at the date of grant and are expensed over three years.

The following table summarizes restricted stock units activity in 2021 and 2020:


	Number of	Weighted Average
	Restricted Stock	Grant Date Fair
	Units Outstanding	Value
Outstanding at January 1, 2021	131,398	$	23.57
Granted	59,401		25.51
Vested and exercised	(38,202)		27.33
Forfeited	(18,980)		22.72
Outstanding at December 31, 2021	133,617	$	23.48


	Number of	Weighted Average
	Restricted Stock	Grant Date Fair
	Units Outstanding	Value
Outstanding at January 1, 2020	106,552	$	25.82
Granted	63,667		21.98
Vested and exercised	(31,565)		27.38
Forfeited	(7,256)		25.60
Outstanding at December 31, 2020	131,398	$	23.57

Restricted stock units include cash-based restricted stock units (CRSUs), total CRSUs vested and exercised during 2022 and 2020 were 20,568 and 13,290 shares, respectively. Unrecognized expense for non-vested RSUs totaled $2.1 million

as of December 31, 2021, which is expected to be recognized over the weighted average remaining contractual maturity term of 1.9 years.

Employee Stock Purchase Plan

The Company maintains an employee stock purchase plan (ESPP) under which employees, through payroll deductions, are able to purchase shares of Company common stock. The purchase price is 92% of the lower of the market price on the first or last day of the offering period. The maximum number of shares issuable during any offering period is 200,000 shares however, as of December 31, 2021, December 31, 2020 and December 31, 2019, there were 167,502, 186,983 and 200,000 shares available for issuance under the ESPP, respectively. Participants may not purchase more than 400 shares during any offering period and, in any event, no more than $25 thousand worth of common stock in any calendar year. The ESPP has been determined to be non-compensatory in nature. As a result, the Company expects that expenses related to the ESPP will not be material. During the years ended December 31, 2021, 2020 and 2019, there were 19,481, 13,017 and zero shares of common stock issued under the ESPP, respectively.