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Stock-Based Compensation
 9 Months Ended
Sep. 30, 2021
Share Based Compensation Arrangement By Share Based Payment Award Additional General Disclosures [Abstract]  
Stock-Based Compensation

(8) Stock-Based Compensation

In August 2018, shareholders approved the Company’s 2018 Equity Incentive Plan, which authorizes the issuance of up to 133,987 shares of common stock pursuant to restricted stock grants and up to 334,970 shares of common stock pursuant to the exercise of options. Amounts related to periods prior to the date of the Conversion (January 20, 2021) have been restated to give the retroactive recognition to the exchange ratio applied in the Conversion (0.90686-to-one) (see Note 1).

A Black-Scholes model is utilized to estimate the fair value of stock option grants, while the market price of the Company’s stock at the date of grant is used to estimate the fair value of restricted stock awards. The weighted average assumptions used in the Black-Scholes model for valuing stock option grants were as follows. Dividend yield is 0%, expected volatility is 36.62%, the risk-free interest rate is 1.04%, expected average life is 7.5 years and the weighted average per share fair value of options is $5.34.

Stock options of 13,454 shares with a weighted average exercise price of $13.09 were granted during the nine months ended September 30, 2021. There were no restricted stock grants during the nine months ended September 30, 2021.

A summary of the Company’s stock option activity is summarized below.

 

Stock Options

 

Option Shares Outstanding

 

 

Weighted Average Exercise Price

 

 

Weighted Average Remaining Life (Years)

 

 

Aggregate Intrinsic Value (in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Outstanding - December 31, 2020

 

 

321,516

 

 

$

9.77

 

 

 

 

 

 

 

 Granted

 

 

—

 

 

 

—

 

 

 

 

 

 

 

Exercise of stock options*

 

 

—

 

 

 —

 

 

 

 

 

 

 

 Forfeited

 

 

—

 

 

 

—

 

 

 

 

 

 

 

 Outstanding - March 31, 2021

 

 

321,516

 

 

$

9.77

 

 

 

8.20

 

 

$

464

 

 Exercisable - March 31, 2021

 

 

38,186

 

 

$

11.14

 

 

 

8.00

 

 

$

—

 

 Granted

 

 

—

 

 

 

—

 

 

 

 

 

 

 

Exercise of stock options*

 

 

—

 

 

 —

 

 

 

 

 

 

 

 Forfeited

 

 

—

 

 

 

—

 

 

 

 

 

 

 

 Outstanding - June 30, 2021

 

 

321,516

 

 

$

9.77

 

 

 

7.95

 

 

$

521

 

 Exercisable - June 30, 2021

 

 

102,489

 

 

$

10.28

 

 

 

8.08

 

 

$

104

 

 Granted

 

 

13,454

 

 

$

13.09

 

 

 

 

 

 

 

Exercise of stock options*

 

 

 

 

 —

 

 

 

 

 

 

 

 Forfeited

 

 

—

 

 

 

—

 

 

 

 

 

 

 

 Outstanding - September 30, 2021

 

 

334,970

 

 

$

9.90

 

 

 

8.05

 

 

$

842

 

 Exercisable - September 30, 2021

 

 

102,489

 

 

$

10.28

 

 

 

7.83

 

 

$

216

 

 

* The terms of the stock option agreements permit having a number of shares of stock withheld, the fair market value of which as of the date of exercise is sufficient to satisfy the exercise price and/or tax withholding requirements.

Intrinsic value represents the amount by which the fair market value of the underlying stock exceeds the exercise price of the stock options. A summary of the Company’s restricted stock activity is summarized below.

 

Restricted Stock

 

 

 

 

 

Weighted Average Grant Date Fair Value

 

 

 

Restricted Shares Outstanding

 

 

 

 

 

 

 

 

 

 

 

 

 

 Outstanding - December 31, 2020

 

 

 

 

 

$

8.63

 

 

 

 

120,123

 

 Granted

 

 

 

 

 

 

—

 

 

 

 

—

 

Vested*

 

 

 

 

 

 

—

 

 

 

 

—

 

 Forfeited

 

 

 

 

 

 

—

 

 

 

 

—

 

 Outstanding - March 31, 2021

 

 

 

 

 

$

8.63

 

 

 

 

120,123

 

 Granted

 

 

 

 

 

$

—

 

 

 

 

—

 

Vested*

 

 

 

 

 

 

8.63

 

 

 

 

26,787

 

 Forfeited

 

 

 

 

 

 

—

 

 

 

 

—

 

 Outstanding - June 30, 2021

 

 

 

 

 

$

8.63

 

 

 

 

93,336

 

 Granted

 

 

 

 

 

$

—

 

 

 

 

—

 

Vested*

 

 

 

 

 

 

—

 

 

—

 

 

—

 

 Forfeited

 

 

 

 

 

 

—

 

 

 

 

—

 

 Outstanding - September 30, 2021

 

 

 

 

 

$

8.63

 

 

 

 

93,336

 

 

* The terms of the restricted stock agreements permit the surrender of shares to the Company upon vesting in order to satisfy applicable tax withholding requirements at the minimum statutory withholding rate, and accordingly, 2,641 shares were surrendered during the three months ended June 30, 2021.

 

The Company recognized approximately $110,000, $295,000, $110,000 and $188,000 (after taking into account the reversals of previously recognized expense related to forfeitures of stock options and restricted stock of approximately $152,000 during the nine months ended September 30, 2020) of stock-based compensation expense during the three months and nine months ended September 30, 2021 and 2020, respectively, associated with its common stock awards granted to directors and officers.

 

As of September 30, 2021, there was approximately $1.4 million of unrecognized compensation cost related to equity award grants. The cost is expected to be recognized over the weighted average remaining vesting period of approximately 3.25 years.