Share-Based Compensation

The Company has two share based compensation plans as described below. Share-based compensation cost recognized for those plans was $25,000 for the three month periods ended March 31, 2014 and 2013. The recognized tax benefits for the share based compensation expense were $7,000 and $4,000, respectively, for the three month periods ended March 31, 2014 and 2013.

The Central Valley Community Bancorp 2000 Stock Option Plan (2000 Plan) expired on November 15, 2010. Outstanding options under this plan are exercisable until their expiration, however no new options will be granted under this plan.

The Central Valley Community Bancorp 2005 Omnibus Incentive Plan (2005 Plan) was adopted in May 2005. The plan provides for awards in the form of incentive stock options, non-statutory stock options, stock appreciation rights, and restricted stock. The plan also allows for performance awards that may be in the form of cash or shares of the Company, including restricted stock.

Stock Option Plan

The Company bases the fair value of the options granted on the date of grant using a Black-Scholes Merton option pricing model that uses assumptions based on expected option life and the level of estimated forfeitures, expected stock volatility, risk free interest rate, and dividend yield. The expected term and level of estimated forfeitures of the Company’s options are based on the Company’s own historical experience. Stock volatility is based on the historical volatility of the Company’s stock. The risk-free rate is based on the U. S. Treasury yield curve for the periods within the contractual life of the options in effect at the time of grant. The compensation cost for options granted is based on the weighted average grant date fair value per share.

No options to purchase shares of the Company’s common stock were granted during the quarters ended March 31, 2014 and 2013 from either of the Company’s stock based compensation plans.

A summary of the combined activity of the Company’s Stock Option Compensation Plans for the three month period ended March 31, 2014 follows(in thousands, except per share amounts):



	Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (Years)	Aggregate Intrinsic Value (In thousands)
Options outstanding at January 1, 2014	380,430		$	8.83
Options exercised	(1,500	)	$	6.52
Options forfeited	(620	)	$	7.80
Options outstanding at March 31, 2014	378,310		$	8.84	4.46	$	1,236
Options vested or expected to vest at March 31, 2014	372,998		$	8.86	4.41	$	1,214
Options exercisable at March 31, 2014	279,490		$	9.37	3.24	$	825

Information related to the stock option plan as of and for the three months ended March 31, 2014 and 2013 follows (in thousands, except per share amounts):



	For the Quarter Ended March 31,
	2014		2013
Intrinsic value of options exercised	$	7	$	2
Cash received from options exercised	$	10	$	4

As of March 31, 2014, there was $243,000 of total unrecognized compensation cost related to nonvested share-based compensation arrangements granted under both plans. The cost is expected to be recognized over a weighted average period of 2.94 years. The total fair value of options vested was $2,000 for the three months ended March 31, 2014 and 2013.

Restricted Common Stock Awards

The 2005 Plan provides for the issuance of shares to directors and officers. Restricted common stock grants typically vest over a five-year period. Restricted common stock (all of which are shares of our common stock) is subject to forfeiture if employment terminates prior to vesting. The cost of these awards is recognized over the vesting period of the awards based on the fair value of our common stock on the date of the grant.

The following table summarizes restricted stock activity for the three month period ended March 31, 2014 as follows:



	Shares	Weighted Average Grant Date Fair Value
Nonvested outstanding shares at January 1, 2014	—	$	—
Granted	8,905	$	11.23
Vested	—	$	—
Forfeited	—	$	—
Nonvested outstanding shares at March 31, 2014	8,905	$	11.23

During the quarter ended March 31, 2014, 8,905 shares of restricted common stock were granted from the 2005 Plan. The restricted common stock had a fair market value of $11.23 on the date of grant. These restricted common stock awards vest 20% after Year 1. Thereafter, 20% of the remaining restricted stock will vest on each anniversary of the initial award commencement date.

As of March 31, 2014, there were 8,905 shares of restricted stock that are nonvested and expected to vest. Share-based compensation cost charged against income for restricted stock awards was $2,000 for the three month period ended March 31, 2014. None was charged to income for the three month period ended March 31, 2013.

As of March 31, 2014, there was $98,000 of total unrecognized compensation cost related to nonvested restricted common stock. Restricted stock compensation expense is recognized on a straight line basis over the vesting period. This cost is expected to be recognized over a weighted average remaining period of 4.84 years and will be adjusted for subsequent changes in estimated forfeitures. Restricted common stock awards had an intrinsic value of $102,496 at March 31, 2014.