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Note 12 - Share-based Compensation
 12 Months Ended
Dec. 31, 2016
Notes to Financial Statements  
Disclosure of Compensation Related Costs, Share-based Payments [Text Block]
Note
12.
Share-based Compensation
 
The Company maintains the Patriot National Bancorp, Inc.
2012
Stock Plan (the “Plan”) to provide an incentive to directors and employees of the Company by the grant of restricted stock awards (“RSA”), options, or phantom stock units. Since
2013,
the Company’s practice is to grant RSAs; as of
December
31,
2016,
there are no options or phantom stock units outstanding or that have been exercised.
 
The Plan provides for the issuance of up to
3,000,000
shares of the Company’s common stock subject to certain Plan limitations. As of
December
 
31,
2016,
2,885,516
shares of stock remain available for issuance under the Plan. In accordance with the terms of the Plan, the vesting of RSAs and options
may
be accelerated at the discretion of the Compensation Committee of the Board of Directors. The Compensation Committee sets the terms and conditions applicable to the vesting of RSAs and stock option grants. RSAs granted to directors and employees generally vest in quarterly or annual installments over a
three,
four
or
five
year period from the date of grant. During the years ended
December
31,
2016,
2015,
and
2014,
the Company granted
52,200,
5,000,
and
68,814
restricted shares to employees and
5,884,
7,700,
and
4,744
restricted shares to directors, respectively. Additionally, during the year ended
December
31,
2016,
the Company issued
8,161
shares of restricted stock that became fully vested during the period and reclaimed
70,513
shares of restricted stock that were forfeited and added-back to shares available for granting to directors and employees. All RSAs are non- participating grants.
 
The Company recognizes compensation expense for all director and employee share-based compensation awards on a straight-line basis over the requisite service period, which is equal to the vesting schedule of each award, for each vesting portion of an award equal to its grant date fair value. For the years ended
December
 
31,
2016,
2015
and
2014,
the Company recognized share-based compensation expense of
$161,000,
$461,000,
and
$275,000,
respectively.
 
For the years ended
December
31,
2016,
2015
and
2014,
share-based compensation attributable to employees of Patriot amounted to
$100,000,
$415,000,
and
$232,000,
respectively
 
Included in share-based compensation expense for the years ended
December
31,
2016,
2015,
and
2014
is
$61,000,
$46,000,
and
$43,000
attributable to Patriot’s external Directors, who received total compensation of
$302,000,
$243,000,
and
$176,000
for each of those years, respectively, which amounts are included in Other Operating Expenses in the Consolidated Statements of Operations.
 
 
The following is a summary of the status of the Company’s restricted share awards as of and for each of the years in the
three
-year period ended
December
 
31,
2016.
 
 
 
Number
of
Shares Awarded
(1)
 
 
Weighted Average
Grant Date
Fair Value
(1)
 
Unvested at December 31, 2013
    
28,182
    $
12.60
 
Granted
    
73,558
    $
13.21
 
Vested
    
(22,532
 )   $
11.76
 
Unvested at December 31, 2014
    
79,208
    $
12.79
 
Granted
    
12,700
    $
16.85
 
Vested
    
(32,015
 )   $
13.14
 
Forfeited
    
(4,039
 )   $
14.36
 
Unvested at December 31, 2015
    
55,854
    $
12.83
 
Granted
    
58,084
    $
15.25
 
Vested
    
(8,161
 )   $
14.79
 
Forfeited
    
(70,513
 )   $
14.67
 
Unvested at December 31, 2016
    
35,264
    $
12.84
 
   
(1)
  On
March
4,
2015,
the Company effected a
1
-for-
10
reverse stock split. The information included in the table above has been restated (as applicable) to give effect to the reverse stock split. Dilutive unvested shares of restricted stock are included in the calculation of diluted Earnings Per Share.
  
Compensation expense attributable to the unvested restricted shares outstanding as of
December
31,
2016
amounts to
$451,000,
which amount is expected to be recognized over the weighted average remaining life of the awards of
3.03
years.
 
 
RSA Grant - Non-executive Employees
 
On
January
4,
2016,
the Company granted
100
restricted shares to
eighty
-
seven
full- and part-time non-executive employees as of
December
31,
2015.
The total number of shares granted was
8,700
at a grant date fair value of
$15.50
per share, resulting in expected future employee compensation of
$135,000.
The shares granted vest in
three
-years on
January
2,
2019
and are non-participating during the vesting period.
 
As of
December
31,
2016,
1,800
of the shares granted have been forfeited. The remaining
6,900
shares continue to vest and
$71,000
of compensation expense is expected to be recognized through the
January
2019
vesting date.