Stock-Based Compensation Plans

12 Months Ended

Dec. 31, 2021

Share Based Compensation Arrangement By Share Based Payment Award Additional General Disclosures [Abstract]

(11) Stock-Based Compensation Plans

The Company may grant stock options and restricted stock under its stock-based compensation plans to certain officers, employees and directors. These plans are administered by a committee of the Board of Directors. In August 2018, with

subsequent shareholder approval, the 2018 Equity Incentive Plan was approved up to 133,987 share of common stock and up to 334,970 stock 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.


	December 31
		2021			2020

Dividend yield		0.00	%		0.00	%
Expected volatility		36.62	%		25.40	%
Risk-free interest rate		1.04	%		0.53	%
Expected average life		7.5			7.5
Weighted average per share fair value	$	5.34		$	2.02

Stock options of 13,454 with a weighted average exercise price of $13.09 were granted during the year ended December 31, 2021. There were no restricted stock grants during the year ended December 31, 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 - January 1, 2020		324,916		$	11.14		9.30		—
Granted		130,588			7.77
Exercise of stock options*		—		—
Forfeited		(133,988	)		—
Outstanding - December 31, 2020		321,516		$	9.77		8.60	$	203
Exercisable - December 31, 2020		38,186		$	11.14		8.20	$	—
Granted		13,454		$	13.09
Exercise of stock options*				—
Forfeited		—			—
Outstanding - December 31, 2021		334,970		$	9.90		7.80	$	676
Exercisable - December 31, 2021		102,489		$	10.28		7.57	$	274

* 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 - January 1, 2020	$	10.10		120,588
Granted		7.05		64,666
Vested*		—		(13,865	)
Forfeited		—		(51,266	)
Outstanding - December 31, 2020	$	8.63		120,123
Granted	$	—		—
Vested*		—		(26,787	)
Forfeited		—		—
Outstanding - December 31, 2021	$	8.63		93,336

*The terms of the restricted stock agreements permit the surrender of shares of 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 year ended December 31, 2021.

The Company recognized approximately $410,000 and $298,000 of stock-based compensation expense (included in salary and employee benefits on the consolidated statements of income) during 2021 and 2020, respectively, associated with its common stock awards granted to directors and officers.

As of December 31, 2021, there was approximately $1.2 million of unrecognized compensation cost related to equity award grants. The cost is expected to be recognized over the remaining vesting period of approximately 3.0 years.