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STOCK PLANS AND STOCK-BASED COMPENSATION | 6 Months Ended
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Sep. 30, 2020
STOCK PLANS AND STOCK-BASED COMPENSATION |
STOCK PLANS AND STOCK-BASED COMPENSATION | 3. STOCK PLANS AND STOCK-BASED COMPENSATION Stock Option Plans - In July 2003, shareholders of the Company approved the adoption of the 2003 Stock Option Plan (“2003 Plan”). The 2003 Plan was effective in July 2003 and expired in July 2013. Accordingly, no further option awards may be granted under the 2003 Plan; however, any awards granted prior to their respective expiration dates remain outstanding subject to their terms. Each option granted under the 2003 Plan has an exercise price equal to the fair market value of the Company’s common stock on the date of the grant, a maximum term of ten years and a vesting period from zero to five years. In July 2017, the shareholders of the Company approved the Riverview Bancorp, Inc. 2017 Equity Incentive Plan (“2017 Plan”). The 2017 Plan provides for the grant of incentive stock options, non-qualified stock options, restricted stock and restricted stock units. The Company has reserved 1,800,000 shares of its common stock for issuance under the 2017 Plan. The 2003 Plan and the 2017 Plan are collectively referred to as “the Stock Option Plans”. The fair value of each stock option granted is estimated on the date of grant using the Black-Scholes stock option valuation model. The fair value of all awards is amortized on a straight-line basis over the requisite service periods, which are generally the vesting periods. The expected life of options granted represents the period of time that they are expected to be outstanding. The expected life is determined based on historical experience with similar options, considering the contractual terms and vesting schedules. Expected volatility is estimated at the date of grant based on the historical volatility of the Company's common stock. Expected dividends are based on dividend trends and the market value of the Company's common stock at the time of grant. The risk-free interest rate for periods within the contractual life of the options is based on the U.S. Treasury yield curve in effect at the time of the grant. There were no stock options granted under the 2017 Stock Option Plan during the six months ended September 30, 2020 and 2019. As of September 30, 2020, all outstanding stock options were fully vested and there was no remaining unrecognized compensation expense related to stock options granted under the Stock Option Plans. There was no stock-based compensation expense related to stock options for the six months ended September 30, 2020 and 2019 under the Stock Option Plans. The following table presents the activity related to stock options under the Stock Option Plans for the periods shown:
|  | Six Months Ended |  | Six Months Ended
|  | September 30, 2020 |  | September 30, 2019
|  |  |  | Weighted |  |  |  | Weighted
|  |  |  | Average |  |  |  | Average
|  | Number of |  | Exercise |  | Number of |  | Exercise
|  | Shares |  | Price |  | Shares |  | Price
Balance, beginning of period |  | 43,332 |  | $ | 2.69 |  | 101,332 |  | $ | 3.26
Options exercised |  | (5,000) |  |  | 1.97 |  | (58,000) |  |  | 3.69
Balance, end of period |  | 38,332 |  | $ | 2.78 |  | 43,332 |  | $ | 2.69
The following table presents information on stock options outstanding, less estimated forfeitures, as of September 30, 2020 and 2019:
|  | 2020 |  | 2019
Stock options fully vested and expected to vest: |  |  |  |  |  |
Number |  |  | 38,332 |  |  | 43,332
Weighted average exercise price |  | $ | 2.78 |  | $ | 2.69
Aggregate intrinsic value (1) |  | $ | 52,000 |  | $ | 203,000
Weighted average contractual term of options (years) |  |  | 2.60 |  |  | 3.30
Stock options fully vested and currently exercisable: |  |  |  |  |  |
Number |  |  | 38,332 |  |  | 43,332
Weighted average exercise price |  | $ | 2.78 |  | $ | 2.69
Aggregate intrinsic value (1) |  | $ | 52,000 |  | $ | 203,000
Weighted average contractual term of options (years) |  |  | 2.60 |  |  | 3.30
(1) The aggregate intrinsic value of a stock option in the table above represents the total pre-tax intrinsic value (the amount by which the current market value of the underlying stock exceeds the exercise price) that would have been received by the option holders had all option holders exercised. This amount changes based on changes in the market value of the Company’s stock. The total intrinsic value of stock options exercised was $17,000 and $238,000 for the six months ended September 30, 2020 and 2019, respectively, under the Stock Option Plans. During the three months ended June 30, 2019, the Company granted 82,673 shares of restricted stock pursuant to the 2017 Plan of which vesting for 49,298 shares of restricted stock were time based and vesting for 33,375 shares of restricted stock were performance based subject to attaining certain performance metrics. The Company cancelled 7,913 shares of performance-based restricted stock during the quarter ended June 30, 2020 due to not achieving the underlying performance metrics. During the three months ended September 30, 2020, the Company granted 90,763 shares of restricted stock pursuant to the 2017 Plan of which vesting for 19,453 shares of restricted stock were time based and vesting for 71,310 shares of restricted stock were performance based subject to attaining certain performance metrics. Any potential cancellations of the 71,310 shares of performance-based restricted stock due to not achieving performance metrics will be determined at the end of fiscal year 2021. The fair value of restricted stock awards is equal to the fair value of the Company’s stock on the date of grant. The related stock-based compensation expense is recorded over the requisite service period. Stock-based compensation related to restricted stock grants was $155,000 and $58,000 for the three months ended September 30, 2020 and 2019, respectively. Stock-based compensation related to restricted stock grants was $184,000 and $227,000 for the six months ended September 30, 2020 and 2019, respectively. The unrecognized stock-based compensation related to restricted stock was $516,000 at September 30, 2020. The weighted average vesting period for the restricted stock was 2.12 years at September 30, 2020. The following table presents the activity related to restricted stock as of September 30, 2020:
|  | Time Based |  | Performance Based |  | Total
|  |  |  | Weighted |  |  |  | Weighted |  |  |  | Weighted
|  | Number of |  | Average |  | Number of |  | Average |  | Number of |  | Average
|  | Unvested |  | Market |  | Unvested |  | Market |  | Unvested |  | Market
|  | Shares |  | Price |  | Shares |  | Price |  | Shares |  | Price
Balance, beginning of period |  | 49,298 |  | $ | 8.35 |  | 33,375 |  | $ | 8.35 |  | 82,673 |  | $ | 8.35
Granted |  | 19,453 |  |  | 4.17 |  | 71,310 |  |  | 4.17 |  | 90,763 |  |  | 4.17
Forfeited |  | — |  |  | — |  | — |  |  | — |  | — |  |  | —
Vested |  | (23,135) |  |  | 8.35 |  | — |  |  | — |  | (23,135) |  |  | 8.35
Cancelled |  | — |  |  | — |  | (7,913) |  |  | 8.35 |  | (7,913) |  |  | 8.35
Balance, end of period |  | 45,616 |  | $ | 6.57 |  | 96,772 |  | $ | 5.27 |  | 142,388 |  | $ | 5.69
Trust Company Stock Options – At September 30, 2020 and 2019, there were 1,000 and 2,500 Trust Company stock options outstanding, respectively, which had been granted to the President and Chief Executive Officer of the Trust Company. During each of the three and six months ended September 30, 2020 and 2019, the Trust Company incurred $11,000 and $22,000, respectively of stock-based compensation expense related to these options. No Trust Company stock options were exercised during the six months ended September 30, 2020 and 2019. There were no Trust Company stock options granted during the six months ended September 30, 2020 and 2019. Unrecognized compensation expense related to the Trust Company stock options totaled $22,000 as of September 30, 2020.

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