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Share Based Compensation Plan

12 Months Ended

Dec. 31, 2019

Share-based Payment Arrangement [Abstract]

Share-based Payment Arrangement [Text Block]

Note 17: Share Based Compensation Plan

In April 2017, the shareholders approved a new share-based incentive compensation plan, the SB Financial Group, Inc. 2017 Stock Incentive Plan (the “2017 Plan”), which replaced the Company’s 2008 Stock Incentive Plan. This plan permits the grant or award of incentive stock options, nonqualified stock options, stock appreciation rights (“SAR’s”), restricted stock, and restricted stock units (“RSU’s”) for up to 500,000 Common Shares of the Company.

The 2008 Plan, which was approved by the shareholders in April 2008, permitted the grant or award of incentive stock options, nonqualified stock options, stock appreciation rights, and restricted stock for up to 250,000 Common Shares of the Company.

The 2008 and 2017 Plans are 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 Plans permit 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 2019 or 2018. There was no compensation expense charged against income with respect to option awards under the Plans for 2019 or 2018.

A summary of incentive stock option activity under the Company’s plans as of December 31, 2019 and changes during the year ended is presented below:

	Shares			Weighted-Average Exercise Price		Weighted-Average Remaining Term		Aggregate Intrinsic Value

Outstanding, beginning of year		64,000		$	6.99
Granted		-			-
Exercised		(35,750	)		7.00
Forfeited		-			-
Expired		-			-
Outstanding, end of year		28,250		$	6.98		0.13	$	359,058

Exercisable, end of year		28,250		$	6.98		0.13	$	359,058

During 2019, the 35,750 option shares exercised had a total intrinsic value of $0.4 million and the cash received from these exercised options was $0.2 million. The tax benefit from these transactions was immaterial.

As of December 31, 2019, 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 LTI Plan awards restricted stock in the Company to certain key executives under the 2008 and 2017 Plans. These restricted stock awards vest over a four-year period and are intended to assist the Company in retention of key executives. During 2019 and 2018, the Company met certain performance targets and restricted stock awards were approved by the Board. The compensation cost charged against income for the LTI Plan was $0.4 and $0.3 million for 2019 and 2018, respectively. The total income tax benefit recognized in the income statement for share-based compensation arrangements was $0.1 and $0.1 million for 2019 and 2018, respectively.

A summary of restricted stock activity under the Company’s LTI Plan as of December 31, 2019 (issued under both the 2008 and 2017 plan) and changes during the year ended is presented below:

	Shares			Weighted-Average Value per Share

Nonvested, beginning of year		46,894		$	16.31

Granted		27,590			18.06
Vested		(25,010	)		16.05
Forfeited		(5,733	)		17.53

Nonvested, end of year		43,741		$	17.41

As of December 31, 2019, there was $0.5 million of total unrecognized compensation cost related to non-vested share-based compensation arrangements related to the restricted stock awards under the 2008 and 2017 Plan which were granted in accordance with the LTI Plan. That cost is expected to be recognized over a weighted-average period of 1.68 years.