Finward Bancorp Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Stock Based Compensation

Stock Based Compensation

9 Months Ended

Sep. 30, 2017

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Disclosure of Compensation Related Costs, Share-based Payments [Text Block]

Note 9 - Stock Based Compensation

The Bancorp’s 2015 Stock Option and Incentive Plan (the Plan), which was adopted by the Bancorp’s Board of Directors on February 27, 2015 and approved by the Bancorp’s shareholders on April 24, 2015, permits the grant of equity awards for up to 250,000 shares of common stock. Awards granted under the Plan may be in the form of incentive stock options, non-qualified stock options, restricted stock, unrestricted stock, performance shares, or performance units.

As required by the Stock Compensation Topic, companies are required to record compensation cost for stock options and awards provided to employees in return for employment service. For the nine months ended September 30, 2017, stock based compensation expense of $142 thousand was recorded, compared to $104 thousand for the nine months ended September 30, 2016. It is anticipated that current outstanding unvested options and awards will result in additional compensation expense of approximately $51 thousand in 2017 and $147 thousand in 2018.

There were no incentive stock options granted during the first nine months of 2017 or 2016. When options are granted, the cost is measured at the fair value of the options when granted, and this cost is expensed over the employment service period, which is normally the vesting period of the options or awards.

A summary of incentive option activity under the Bancorp’s stock option and incentive plans described above for the nine months ended September 30, 2017 follows:

					Weighted-
			Weighted-		Average
			Average		Remaining		Aggregate
			Exercise		Contractual		Intrinsic
Incentive options	Shares		Price		Term		Value
Outstanding at January 1, 2017		500	$	28.50
Granted		-		-
Exercised		-		-
Forfeited		-		-
Expired		-	$	-
Outstanding at September 30, 2017		500	$	28.50		0.4		6,500
Exercisable at September 30, 2017		500	$	28.50		0.4		6,500

There were 4,575 shares of restricted stock granted during the first nine months of 2017 compared to 8,740 shares granted during the first nine months of 2016. Restricted stock awards are issued with an award price equal to the market price of the Bancorp’s common stock on the award date and vest five years after the grant date. Forfeiture provisions exist for personnel that separate employment before the vesting period expires. A summary of restricted stock activity under the Bancorp’s incentive stock option and incentive plans described above for the nine months ended September 30, 2017 follows:

			Weighted-
			Average
			Grant Date
Restricted stock	Shares		Fair Value
Nonvested at January 1, 2017		28,465	$	26.67
Granted		4,575		39.00
Vested		1,625		25.81
Forfeited		725		28.62
Nonvested at September 30, 2017		30,690	$	28.51