The Company has granted restricted stock awards to employees and directors under the Company’s 2017 Equity Incentive Plan. The restricted stock awards are considered fixed awards as the number of shares and fair value is known at the date of grant, and the fair value of the award at the grant date is amortized over the requisite service period. Compensation expense recognized in the consolidated statements of income related to restricted stock awards, net of forfeitures, was $511 thousand and $848 thousand for the three and nine months ended September 30, 2021, respectively, and was $199 thousand and $331 thousand for the three and nine months ended September 30, 2020, respectively. On July 1, 2021, the Company granted restricted stock awards relating to 173,484 shares of the Company's common stock to employees and directors. At September 30, 2021, restricted stock awards relating to 237,785 shares of the Company’s common stock were outstanding and unrecognized compensation expense related to the restricted stock awards at September 30, 2021 totaled $3.1 million.

The Company converted fully vested options to purchase 198,362 shares of Bay Banks common stock into options to purchase 99,176 shares (148,764 on a post Stock Split basis) of the Company’s common stock pursuant to the Bay Banks Merger. The estimated fair value of the converted stock options as of the effective date of the merger was $472 thousand and included in the Bay Banks Merger consideration.

The estimated fair value of $472 thousand was determined using the Black-Scholes Model, which requires the use of assumptions including the risk-free interest rate, expected term, expected volatility (of the underlying stock), and expected dividend yield. The following table presents the ranges and weighted averages of assumptions used to determine the estimated fair value of the converted stock options in the Bay Banks Merger.


	As of January 31, 2021
	Range	Weighted-average
Risk free interest rate (U.S. Treasury)	0.06% - 0.45%	0.32%
Expected term (years)	0.14 - 5.00	3.89
Expected volatility	21.2% - 38.2%	32.8%
Expected dividend yield	2.85%	2.85%

The weighted-average exercise price and remaining contractual life (in years) of the stock options as of the date of the Bay Banks Merger was $14.83 per stock option ($9.89 on a post Stock Split basis) and 5.47 years, respectively.

During the nine months ended September 30, 2021, 83,647 and 380 stock options were exercised and forfeited, respectively, resulting in 64,737 options outstanding as of September 30, 2021.