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Earnings Per Common Share and Share based compensation
 3 Months Ended
Mar. 31, 2023
Earnings Per Share [Abstract]  
Earnings Per Common Share and Share based compensation

Note 2 - Earnings Per Common Share and Share based compensation

 

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)

         
   Three months ended 
   March 31, 
   2023   2022 
Numerator (Net income available to common shareholders)  $3,463   $3,489 
Denominator          
Weighted average common shares outstanding for:          
Basic shares   7,555    7,518 
Dilutive securities:          
Deferred compensation   32    33 
Restricted stock - Treasury stock method   57    44 
Diluted shares   7,644    7,595 
Earnings per common share:          
Basic  $0.46   $0.46 
Diluted  $0.45    0.46 
           
The average market price used in calculating assumed number of shares  $20.34   $20.99 

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.

 

The table below shows the following information related to First Community Corporation’s Non-Employee Director Deferred Compensation Plan: accumulated share units and accrued liability at March 31, 2023 and December 31, 2022.

 

Schedule of Non-Employee Director Deferred Compensation Plan 

   March 31, 2023   December 31, 2022 
Non-employee director deferred compensation plan accumulated share units   97,126    93,488 
Accrued liability (dollars in thousands)1   1,331    1,260 

 

1 Recorded in “Nonvested restricted stock and stock units”

 

The table below shows related director compensation related to First Community Corporation’s Non-Employee Director Deferred Compensation Plan for the three months ended March 31, 2023 and March 31, 2022

 

   For the three months ended 
Dollars in thousands  March 31, 2023   March 31, 2022 
Related director compensation expense (dollars in thousands)   59    153 

 

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 March 31, 2023 and December 31, 2022. 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 generally cliff vest over a three-year period and the non-employee director shares vest approximately one year after issuance. 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.

First Community Corporation 2021 Omnibus Equity Incentive Plan

In 2021, the Company and its shareholders adopted First Community Corporation 2021 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.

The table below shows stock awards granted during the three months ended March 31, 2023 and March 31, 2022.

         
(In shares/units)  Three Months ended March 31, 
Stock based awards  2023   2022 
Time-based restricted stock units – officer   11,738    11,738 
Performance-based restricted stock units – officer1    16,750    11,738 
Restricted stock – officer   —    — 
Restricted stock – director   7,590    7,359 

 

1 For 2023, 16,750 units represent the target payout with a maximum payout of 33,500 units. For 2022, 11,738 units represent the target payout with a maximum payout of 17,608 units.

 

The table below shows the fair value of stock awards granted during the three months ended March 31, 2023 and March 31, 2022.

 

               
(Dollars in thousands)  Three months ended March 31, 
Fair value of stock awards on grant date  20231   2022 
Time-based restricted stock units – officer   255    246 
Performance-based restricted stock units – officer1    340    246 
Restricted stock – officer   —    — 
Restricted stock – director   154    154 

 

1 For 2023, $340 thousand represents the target payout with a maximum payout of $680 thousand. For 2022, $246 thousand represents the target payout with a maximum payout of $369 thousand.

 

The table below shows the compensation expense related to stock awards for the three months ended March 31, 2023 and March 31, 2022.

               
(Dollars in thousands)  Three months ended March 31, 
Compensation expense related to stock awards  2023   2022 
Restricted stock and stock units – officer1   150    107 
Restricted stock – director2   28    26 

The table below shows the 2021 Plan initial reserve at May 19, 2021; stock awards granted under the 2021 Plan from its inception through March 31, 2023; and the 2021 Plan remaining reserve at March 31, 2023.

     
(In shares / units)    
First Community Corporation 2021 Omnibus Equity Incentive Plan  2023 
Initial reserve – May 19, 2021   225,000 
Shares / units granted     
Time-based restricted stock units – officer   (24,300)
Performance-based restricted stock units – officer1   (51,108)
Restricted stock – officer   (2,201)
Restricted stock – director   (22,539)
Remaining Reserve-March 31, 2023   124,852 

 

1 Performance-based restricted stock units are initially granted and expensed at target levels; however, they are reserved at maximum levels.