Share-Based Compensation

The Company has five share-based compensation plans as described below. Share-based compensation cost recognized for those plans was $332,000 and $310,000 for the nine months ended September 30, 2018 and 2017, respectively. For the quarters ended September 30, 2018 and 2017, share-based compensation expense was $148,000 and $77,000, 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 $142,000 and $102,000, respectively, for the nine months ended September 30, 2018 and 2017. For the quarters ended September 30, 2018 and 2017, recognized tax benefits were $3,000 and $0, respectively.

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. In October 2017, the Company assumed the Folsom Lake Bank 2007 Equity Incentive Plan (2007 Plan). The plans provide for awards in the form of incentive stock options, non-statutory stock options, stock appreciation rights, and restricted stock. Both plans allow 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 each of the three-month offering periods at a 10 percent discount from the lower of the closing market price on the Offering Date (first trading day of each offering period) or the Investment Date (last trading day of each offering period). The Company reserved 500,000 common shares to be set aside for the ESPP, and there were 489,781 shares available for future purchase under the plan as of September 30, 2018.

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 months ended September 30, 2018 and 2017.

A summary of the combined activity of the Company’s stock option compensation plans for the nine months ended September 30, 2018 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, 2018	232,870		$	9.13
Options exercised	(71,470	)	$	10.04
Options forfeited	(4,000	)	$	11.25
Options outstanding at September 30, 2018	157,400		$	8.66	3.07	$	2,038
Options vested or expected to vest at September 30, 2018	157,400		$	8.66	3.07	$	2,038
Options exercisable at September 30, 2018	157,400		$	8.66	3.07	$	2,038

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,
	2018		2017		2018		2017
Intrinsic value of options exercised	$	83	$	13	$	736	$	964
Cash received from options exercised	$	79	$	7	$	719	$	473
Excess tax benefit realized for option exercises	$	3	$	—	$	142	$	104

As of September 30, 2018, there was no remaining unrecognized compensation cost related to stock options granted under all plans. No options vested during the nine months ended September 30, 2018. The total fair value of options vested was $46,000 during the nine months ended September 30, 2017.

Restricted Common Stock Awards

The 2015 Plan provides for the issuance of restricted common stock to directors and officers. Restricted common stock grants typically vest over a one to 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 months ended September 30, 2018 as follows:



	Shares		Weighted Average Grant-Date Fair Value
Nonvested outstanding shares at January 1, 2018	63,768		$	13.33
Granted	22,204		$	20.76
Vested	(20,733	)	$	13.09
Forfeited	(1,685	)	$	14.39
Nonvested outstanding shares at September 30, 2018	63,554		$	15.98

During the quarter ended September 30, 2018, 22,204 shares of restricted stock were granted under the 2015 Plan. During the nine months ended September 30, 2018, 22,204 shares of restricted common stock were granted. The restricted common stock had a weighted average grant date fair market value of $20.76 per share on the date of grant during the nine months ended September 30, 2018. These restricted common stock awards’ fully vest after year 1, or vest ratably until fully vested in year 3 or year 5 depending on agreement terms.

As of September 30, 2018, there were 63,554 shares of restricted stock that are nonvested and expected to vest. As of September 30, 2018, there was $821,000 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 2.15 years and will be adjusted for subsequent changes in estimated forfeitures. Restricted common stock awards had an intrinsic value of $1,308,000 at September 30, 2018.