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Share-Based Compensation Plan

12 Months Ended

Dec. 31, 2021

Share-based Payment Arrangement [Abstract]

Note 20: 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 2017 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 2017 Plan 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 five years of continuous service and have 10-year contractual terms. The fair value of each option award is estimated on the date of grant using the Black-Scholes valuation model. There were no options granted in 2021 or 2020. There were no stock options outstanding, and no compensation expense charged against income with respect to option awards under the Plan as of December 31, 2021 or 2020.

As of December 31, 2021, there was no unrecognized compensation cost related to incentive option share-based compensation arrangements granted under the 2017 Plan.

During 2020, 26,950 option shares exercised had a total intrinsic value of $0.3 million and the cash received from these exercised options was $0.2 million. The tax benefit from these transactions was immaterial.

Pursuant to the Long Term Incentive (“LTI”) Plan, the Company awards restricted stock in the Company to certain key executives under the 2017 Plan. These restricted stock awards vest over a four-year period and are intended to assist the Company in retention of key executives. During 2021 and 2020, 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 million and $0.4 million for 2021 and 2020, respectively. The total income tax benefit recognized in the income statement for share-based compensation arrangements was $0.1 million and $0.1 million for 2021 and 2020, respectively.

A summary of restricted stock activity under the Company’s LTI Plan as of December 31, 2021 and changes during the year ended is presented below:

	Shares			Weighted- Average Value per Share
Nonvested, beginning of year		34,778		$	18.52
Granted		35,854			18.29
Vested		(23,179	)		18.39
Forfeited		(6,531	)		18.33
Nonvested, end of year		40,922		$	18.43

As of December 31, 2021, 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 2017 Plan which were granted in accordance with the LTI Plan. That cost is expected to be recognized over a weighted-average period of 1.83 years.