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Share Based Compensation Plan
 12 Months Ended
Dec. 31, 2016
Share Based Compensation Plan [Abstract]  
Share Based Compensation Plan

Note 16: Share Based Compensation Plan

 

In April 2008, the shareholders approved a new share-based incentive compensation plan, the SB Financial Group, Inc. 2008 Stock Incentive Plan (the "2008 Plan"), which replaced the Company’s 1997 Stock Option Plan.

 

The 2008 Plan permits the grant or award of incentive stock options, nonqualified stock options, stock appreciation rights ("SARs"), and restricted stock for up to 250,000 Common Shares of the Company.

 

The 2008 Plan is intended to advance the interests of the Company and its shareholders by offering employees, directors and advisory board members of the Company and its subsidiaries an opportunity to acquire or increase their ownership interest in the Company through grants of equity-based awards. The 2008 Plan permits equity-based awards to be used to attract, motivate, reward and retain highly competent individuals upon whose judgment, initiative, leadership and efforts are key to the success of the Company by encouraging those individuals to become shareholders of the Company.

 

Option awards are granted with an exercise price equal to the market price of the Company’s stock at the date of grant and those option awards vest based on 5 years of continuous service and have 10-year contractual terms. The fair value of each option award was estimated on the date of grant using the Black-Scholes valuation model. No options were granted in either 2016 or 2015.

 

There was no compensation expense charged against income with respect to option awards under the 2008 Plan for 2016 and 2015, respectively.

 

A summary of incentive option activity under the Company’s plans as of December 31, 2016 and changes during the year then ended, is presented below:

 

  Shares  Weighted-Average Exercise Price  Weighted-Average Remaining Term  Aggregate Intrinsic Value 
             
Outstanding, beginning of year  140,074  $8.12         
Granted  -   -         
Exercised  (38,514)  8.72         
Forfeited  (1,750)  9.56         
Expired  -   -         
Outstanding, end of year  99,810   7.85   2.54  $818,741 
                 
Exercisable, end of year  99,810   7.85   2.54  $818,741 

 

During 2016, the 38,514 option shares exercised had a total intrinsic value of $0.33 million and the cash received from these exercised options was $0.24 million. The tax benefit from these transactions was immaterial.

 

As of December 31, 2016, there was no unrecognized compensation cost related to incentive option share-based compensation arrangements granted under the 2008 Plan.

 

On February 5, 2013, the Company adopted a Long Term Incentive (LTI) Plan. The Plan awards restricted stock in the Company to certain key executives under the 2008 Plan. These restricted stock awards vest over a four-year period and are intended to assist the Company in retention of key executives. During 2016 and 2015, the Company met certain performance targets and restricted stock awards were approved by the Board. The compensation cost charged against income for the Long Term Incentive (LTI) Plan was $0.13 million and $0.08 million for 2016 and 2015, respectively. The total income tax benefit recognized in the income statement for share-based compensation arrangements was $0.04 million and $0.03 million for 2016 and 2015, respectively.

 

A summary of restricted stock activity under the Company’s plan as of December 31, 2016 and changes during the year ended is presented below:

 

  Shares  Weighted-Average Value per Share 
       
Nonvested, beginning of year  27,328  $8.77 
         
Granted  17,280   10.03 
Vested  (9,110)  8.55 
Forfeited  -   - 
         
Nonvested, end of year  35,498  $9.44 

 

As of December 31, 2016, there was $0.31 million of total unrecognized compensation cost related to non-vested share-based compensation arrangements related to the restricted stock awards under the 2008 Plan which were granted in accordance with the Long Term Incentive (LTI) plan. That cost is expected to be recognized over a weighted-average period of 2.05 years.