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Earnings Per Common Share
 9 Months Ended
Sep. 30, 2021
Earnings Per Share [Abstract]  
Earnings Per Common Share

Note 2—Earnings Per Common Share

 

The following reconciles the numerator and denominator of the basic and diluted earnings per common share computation:

 

(In thousands except average market price and per share data)

 

   Nine months   Three months 
   Ended September 30,   Ended September 30, 
   2021   2020   2021   2020 
                 
Numerator (Net income available to common shareholders)  $11,546   $6,663   $4,748   $2,652 
Denominator                    
Weighted average common shares outstanding for:                    
Basic shares   7,487    7,440    7,499    7,458 
Dilutive securities:                    
Deferred compensation   28    24    31    13 
                     
Restricted stock – Treasury stock method   25    11    26    11 
Diluted shares   7,540    7,475    7,556    7,482 
Earnings per common share:                    
Basic   1.54    0.90    0.63    0.36 
Diluted   1.53    0.89    0.63    0.35 
The average market price used in calculating assumed number of shares  $19.37   $15.87   $20.20   $13.69 

 

Non-Employee Director Deferred Compensation Plan

 

Under the Company’s Non-Employee Director Deferred Compensation Plan, as amended and restated effective as of January 1, 2021, a director may elect to defer all or any part of annual retainer and monthly meeting fees payable with respect to service on the board of directors or a committee of the board. Units of common stock are credited to the director’s account as of the last day of such calendar quarter during which the compensation is earned and are included in dilutive securities in the table above. The non-employee director’s account balance is distributed by issuance of common stock within 30 days following such director’s separation from service from the board of directors. At September 30, 2021 and December 31, 2020, there were 84,565 and 88,412 units in the plan, respectively. The accrued liability at September 30, 2021 and December 31, 2020 amounted to $1.1 million and is included in “Other liabilities” on the balance sheet.

 

First Community Corporation 2011 Stock Incentive Plan

 

In 2011, the Company and its shareholders adopted a stock incentive plan whereby 350,000 shares were reserved for issuance by the Company upon the grant of stock options or restricted stock awards under the plan (the “2011 Plan”). The 2011 Plan provided for the grant of options to key employees and directors as determined by a stock option committee made up of at least two members of the board of directors. Options are exercisable for a period of ten years from the date of grant. There were no stock options outstanding and exercisable at September 30, 2021, December 31, 2020 and September 30, 2020. At December 31, 2020, the Company had 94,910 shares reserved for future grants under the 2011 Plan. The 2011 Plan expired on March 15, 2021 and no new awards may be granted under the 2011 Plan. However, any awards outstanding under the 2011 Plan will continue to be outstanding and governed by the provisions of the 2011 Plan. 

Under the 2011 Plan, the employee restricted shares and units cliff vest over a three-year period and the non-employee director shares vest approximately one year after issuance. The unrecognized compensation cost at September 30, 2021 and December 31, 2020 for non-vested shares amounts to $386.1 thousand and $283.1 thousand, respectively. Each unit is convertible into one share of common stock at the time the unit vests. The related compensation cost for time-based units is accrued over the vesting period and was $70.7 thousand and $107.4 thousand at September 30, 2021, and December 31, 2020, respectively.

 

Historically, the Company granted time-based equity awards that vested based on continued service. Beginning in 2021 and in addition to time-based equity awards, the Company began granting performance-based equity awards in the form of performance-based restricted stock units, with the target number of performance-based restricted stock units for the Company’s Chief Executive Officer and other executive officers representing 50% of total target equity awards. These performance-based restricted stock units cliff vest over three years and include conditions based on the following performance measures: total shareholder return, return on average equity, and non-performing assets. The Company granted 13,302 performance-based restricted stock units with a fair value of $234.0 thousand during the first nine months of 2021. The Company granted no performance-based restricted stock units in 2020. The related compensation cost for the performance-based restricted stock units is accrued over the vesting period and was $45.5 thousand during the first nine months of 2021. The total related compensation cost for restricted stock units was $116.2 thousand and $107.4 thousand at September 30, 2021, and December 31, 2020, respectively, including both time-based and performance-based restricted stock units.

 

First Community Corporation 2021 Omnibus Equity Incentive Plan

 

In 2021, the Company and its shareholders adopted an omnibus equity incentive plan whereby 225,000 shares were reserved for issuance by the Company to help the company attract, retain and motivate directors, officers, employees, consultants and advisors of the Company and its subsidiaries (the “2021 Plan”). The 2021 Plan replaced the 2011 Plan. No awards have been granted under the 2021 Plan as of September 30, 2021.