Share-Based Compensation

The Company has three share-based compensation plans as described below. Share-based compensation cost recognized for those plans was $310,000 and $196,000 for the nine months ended September 30, 2017 and 2016, respectively. For the quarters ended September 30, 2017 and 2016, share-based compensation was $77,000 and $89,000, respectively. The recognized tax benefits for the share-based compensation expense, forfeitures of restricted stock, and exercise of stock options, resulted in the recognition of $102,000 and $38,000, respectively, for the nine month periods ended September 30, 2017 and 2016. For the quarters ended September 30, 2017 and 2016, recognized tax benefits were $0 and $10,000, respectively. The Company adopted ASU 2016-09 “Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting” during the nine months ended September 30, 2017.

The Central Valley Community Bancorp 2000 Stock Option Plan (2000 Plan) expired on November 15, 2010. The Central Valley Community Bancorp 2005 Omnibus Incentive Plan (2005 Plan) was adopted in May 2005 and expired March 16, 2015.

The Central Valley Community Bancorp 2015 Omnibus Incentive Plan (2015 Plan) was adopted in May 2015. 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. Outstanding arrangements to issue shares under this plan including options, will continue in force until expiration according to their respective terms.

Effective June 2, 2017, the Company adopted an Employee Stock Purchase Plan (ESPP) whereby our employees may purchase Company common stock through payroll deductions of between one percent and 15 percent of pay in each pay period. Shares are purchased at the end of the six-month offering period at a 10 percent discount from the closing market price on the last day of each offering period. The Company has reserved 500,000 common shares to be set aside for the ESPP, and there were 500,000 shares available for future purchase under the plan as of September 30, 2017.

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 nine month periods ended September 30, 2017 and 2016.

A summary of the combined activity of the Company’s stock option compensation plans for the nine month periods ended September 30, 2017 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, 2017	202,215		$	6.87
Options exercised	(69,965	)	$	6.75
Options forfeited	(1,380	)	$	8.02
Options outstanding at September 30, 2017	130,870		$	6.92	3.84	$	2,012
Options vested or expected to vest at September 30, 2017	130,850		$	6.92	3.84	$	2,012
Options exercisable at September 30, 2017	130,670		$	6.92	3.84	$	2,010

Information related to the stock option plan is as follows (in thousands):



	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2017		2016		2017		2016
Intrinsic value of options exercised	$	13	$	71	$	964	$	197
Cash received from options exercised	$	7	$	48	$	473	$	208
Excess tax benefit realized for option exercises	$	—	$	10	$	104	$	19

As of September 30, 2017, there was no remaining unrecognized compensation cost related to nonvested stock options granted under all plans. The total fair value of options vested was $46,000 and $51,000 during the nine months ended September 30, 2017 and 2016, respectively.

Restricted Common Stock Awards

The 2005 Plan and 2015 Plan provide for the issuance of restricted common stock 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 nine month period ended September 30, 2017 as follows:



	Shares		Weighted Average Grant-Date Fair Value
Nonvested outstanding shares at January 1, 2017	93,501		$	13.35
Granted	—		$	—
Vested	(27,373	)	$	13.34
Forfeited	(1,590	)	$	14.10
Nonvested outstanding shares at September 30, 2017	64,538		$	13.34

There were no grants of restricted stock during the quarter ended September 30, 2017 or 2016. During the nine-month period ended September 30, 2017, no shares of restricted common stock were granted from outstanding grants under the 2005 and 2015 Plans. During the nine-month period ended September 30, 2016, 54,650 shares of restricted common stock were granted from outstanding grants under the 2005 and 2015 Plan. The restricted common stock had a fair market value of $14.10 per share on the date of grant during the nine-month period ended September 30, 2016. These restricted common stock awards vest 20% after Year 1, and thereafter, 20% of the remaining restricted stock will vest on each anniversary of the initial award commencement date and will be fully vested on the fifth such anniversary.

As of September 30, 2017, there were 64,538 shares of restricted stock that are nonvested and expected to vest. As of September 30, 2017, there was $736,000 of total unrecognized compensation cost related to nonvested restricted common stock awards. 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 3.06 years and will be adjusted for subsequent changes in estimated forfeitures. Restricted common stock awards had an intrinsic value of $1,439,000 at September 30, 2017.