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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
___________________________
FORM 10-Q
x QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2022
OR
oTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________ to __________
Commission File No. 000-20827
____________________
CASS INFORMATION SYSTEMS, INC.
(Exact name of registrant as specified in its charter)
Missouri43-1265338
(State or other jurisdiction of incorporation or
organization)
(I.R.S. Employer Identification No.)
12444 Powerscourt Drive, Suite 550
St. Louis, Missouri
63131
(Address of principal executive offices) (Zip Code)
(314) 506-5500
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Trading symbols Name of each exchange on which registered
Common stock, par value $.50 CASS The Nasdaq Global Select Market
____________________
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes     x                 No    o
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Yes     x                 No     o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer," “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large Accelerated Filer o
Accelerated Filer
x
 
Non-Accelerated Filer oSmaller Reporting Company o Emerging Growth Company o
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes     ☐                 No    x
The number of shares outstanding of the registrant's only class of common stock as of April 22, 2022: Common stock, par value $.50 per share – 13,652,849 shares outstanding.
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TABLE OF CONTENTS
Forward-looking Statements - Factors That May Affect Future Results
This report may contain or incorporate by reference forward-looking statements made pursuant to the safe harbor provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Although we believe that, in making any such statements, our expectations are based on reasonable assumptions, forward-looking statements are not guarantees of future performance and involve risks, uncertainties, and other factors beyond our control, which may cause future performance to be materially different from expected performance summarized in the forward-looking statements. These risks, uncertainties and other factors are discussed in Part I, Item 1A, “Risk Factors” of the Company’s 2021 Annual Report on Form 10-K, filed with the Securities and Exchange Commission (“SEC”), which may be updated from time to time in our future filings with the SEC. We undertake no obligation to publicly update or revise any forward-looking statements to reflect changed assumptions, the occurrence of anticipated or unanticipated events, or changes to future results over time.
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PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CASS INFORMATION SYSTEMS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollars in Thousands except Share and Per Share Data)
March 31, 2022 (Unaudited)
December 31,
2021
Assets  
Cash and due from banks $22,416 $12,301 
Short-term investments169,033 502,627 
Cash and cash equivalents 191,449 514,928 
Securities available-for-sale, at fair value 774,610 673,453 
Loans 977,202 960,567 
Less: Allowance for credit losses 12,406 12,041 
Loans, net 964,796 948,526 
Payments in advance of funding 329,622 291,427 
Premises and equipment, net 19,086 18,113 
Investment in bank-owned life insurance 47,163 43,176 
Goodwill 14,262 14,262 
Other intangible assets, net 2,429 2,564 
Other assets 78,626 48,452 
Total assets $2,422,043 $2,554,901 
Liabilities and Shareholders’ Equity
Liabilities:
Deposits:
Noninterest-bearing $621,819 $582,642 
Interest-bearing 555,116 638,861 
Total deposits 1,176,935 1,221,503 
Accounts and drafts payable 989,733 1,050,396 
Other liabilities 38,297 37,204 
Total liabilities 2,204,965 2,309,103 
Shareholders’ Equity:
Preferred stock, par value $.50 per share; 2,000,000 shares authorized and no shares issued
  
Common stock, par value $.50 per share; 40,000,000 shares authorized and 15,505,772 shares issued at March 31, 2022 and December 31, 2021; 13,644,741 and 13,734,295 shares outstanding at March 31, 2022 and December 31, 2021, respectively.
7,753 7,753 
Additional paid-in capital 203,149 204,276 
Retained earnings 116,646 112,220 
Common shares in treasury, at cost (1,861,031 shares at March 31, 2022 and 1,771,477 shares at December 31, 2021)
(82,348)(78,904)
Accumulated other comprehensive (loss) income (28,122)453 
Total shareholders’ equity 217,078 245,798 
Total liabilities and shareholders’ equity $2,422,043 $2,554,901 
See accompanying notes to unaudited consolidated financial statements.
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CASS INFORMATION SYSTEMS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(Dollars in Thousands except Per Share Data)
Three Months Ended
March 31,
20222021
Fee Revenue and Other Income:
Processing fees$19,036 $18,375 
Financial fees10,532 6,997 
Other862 803 
Total fee revenue and other income 30,430 26,175 
Interest Income:
Interest and fees on loans 8,777 8,587 
Interest and dividends on securities:
Taxable 1,456 198 
Exempt from federal income taxes 1,677 1,739 
Interest on federal funds sold and other short-term investments 216 152 
Total interest income 12,126 10,676 
Interest Expense:
Interest on deposits 223 331 
Total interest expense 223 331 
Net interest income 11,903 10,345 
 Provision for (release of) credit losses230 (600)
Net interest income after provision for (release of) credit losses11,673 10,945 
Total net revenue 42,103 37,120 
Operating Expense:
Personnel 24,718 22,526 
Occupancy 915 947 
Equipment 1,711 1,675 
Amortization of intangible assets 135 215 
Other operating expense 4,349 3,162 
Total operating expense 31,828 28,525 
Income before income tax expense 10,275 8,595 
Income tax expense 2,017 1,524 
Net income $8,258 $7,071 
Basic earnings per share $.61 $.49 
Diluted earnings per share .60 .49 
See accompanying notes to unaudited consolidated financial statements.
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CASS INFORMATION SYSTEMS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
(Dollars in Thousands)
Three Months Ended
March 31,
20222021
Comprehensive Income:
Net income $8,258 $7,071 
Other comprehensive (loss) income:
Net unrealized loss on securities available-for-sale (37,499)(4,214)
Tax effect 8,925 1,003 
Reclassification adjustments for gains included in net income  (48)
Tax effect  11 
Foreign currency translation adjustments (1)(129)
Total comprehensive (loss) income $(20,317)$3,694 
See accompanying notes to unaudited consolidated financial statements.
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CASS INFORMATION SYSTEMS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Dollars in Thousands)
Three Months Ended
March 31,
20222021
Cash Flows From Operating Activities:  
Net income $8,258 $7,071 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization 2,912 2,978 
Gains on sales of securities  (48)
Stock-based compensation expense 1,090 693 
Provision for (release of) credit losses230 (600)
Increase in current income tax liability 1,911 1,355 
(Decrease) increase in pension liability (640)336 
Increase in accounts receivable (726)(237)
Other operating activities, net 1,688 5,156 
Net cash provided by operating activities 14,723 16,704 
Cash Flows From Investing Activities:
Proceeds from sales of securities available-for-sale  2,991 
Proceeds from maturities of securities available-for-sale 16,194 47,113 
Purchase of securities available-for-sale (156,597)(125,467)
Net (increase) decrease in loans (16,500)3,478 
Purchase of bank-owned life insurance(3,987) 
Increase in payments in advance of funding (38,195)(21,912)
Purchases of premises and equipment, net (2,002)(900)
Net cash used in investing activities (201,087)(94,697)
Cash Flows From Financing Activities:
Net increase (decrease) in noninterest-bearing demand deposits 39,177 (68,645)
Net (decrease) increase in interest-bearing demand and savings deposits (80,002)21,373 
Net decrease in time deposits (3,743)(449)
Net (decrease) increase in accounts and drafts payable (83,054)60,905 
Cash dividends paid (3,832)(3,886)
Purchase of common shares for treasury (5,086)(1,228)
Other financing activities, net (575)(946)
Net cash (used in) provided by financing activities (137,115)7,124 
Net decrease in cash and cash equivalents (323,479)(70,869)
Cash and cash equivalents at beginning of period 514,928 670,528 
Cash and cash equivalents at end of period $191,449 $599,659 
Supplemental information:
Cash paid for interest $216 $311 
Cash paid for income taxes 109 134 
See accompanying notes to unaudited consolidated financial statements.
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CASS INFORMATION SYSTEMS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
THREE MONTHS ENDED MARCH 31, 2022 AND 2021
(Unaudited)
(Dollars in Thousands except per share data)
Common
Stock
Additional
Paid-in
Capital
Retained
Earnings
Treasury
Stock
Accumulated
Other
Comprehensive
Loss
Total
Balance, December 31, 2020
$7,753 $204,875 $99,062 $(50,515)$(15)$261,160 
Net income 7,071 7,071 
Cash dividends ($.27 per share)
(3,886)(3,886)
Issuance of 69,374 common shares pursuant to stock-based compensation plan, net
(2,426)1,596 (830)
Exercise of SARs (314)198 (116)
Stock-based compensation expense 693 693 
Purchase of 31,256 common shares
(1,228)(1,228)
Other comprehensive income (3,377)(3,377)
Balance, March 31, 2021
$7,753 $202,828 $102,247 $(49,949)$(3,392)$259,487 
Balance, December 31, 2021
$7,753 $204,276 $112,220 $(78,904)$453 $245,798 
Net income 8,258 8,258 
Cash dividends ($.28 per share)
(3,832)(3,832)
Issuance of 58,272 common shares pursuant to stock-based compensation plan, net
(1,889)1,399 (490)
Exercise of SARs (328)243 (85)
Stock-based compensation expense 1,090 1,090 
Purchase of 124,874 common shares
(5,086)(5,086)
Other comprehensive loss(28,575)(28,575)
Balance, March 31, 2022
$7,753 $203,149 $116,646 $(82,348)$(28,122)$217,078 
See accompanying notes to unaudited consolidated financial statements.
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CASS INFORMATION SYSTEMS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note 1 - Basis of Presentation
The accompanying unaudited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and notes required by U.S. generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments, consisting of normal recurring accruals, considered necessary for a fair presentation have been included. Certain amounts in prior-period financial statements have been reclassified to conform to the current period’s presentation. Such reclassifications have no effect on previously reported net income or shareholders’ equity. For further information, refer to the audited consolidated financial statements and related footnotes included in Cass Information System, Inc.’s (the “Company” or “Cass”) Annual Report on Form 10-K for the year ended December 31, 2021.
Risks and Uncertainties
On March 11, 2020, the World Health Organization declared the outbreak of COVID-19 as a global pandemic. While the impact of COVID-19 is significantly lessened from March 2020, the ongoing impact, including resurgences of the virus and restrictions imposed to combat its spread, could result in additional and prolonged business closures, supply chain disruptions, work restrictions and activity restrictions. The Company continues to closely monitor developments related to COVID-19 and remains subject to heightened business, operational, market, credit and other risks which may have an adverse effect on its financial condition and results of operations.
Note 2 – Intangible Assets
The Company accounts for intangible assets in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 350, Goodwill and Other Intangible Assets, which requires that intangibles with indefinite useful lives be tested annually for impairment, or when management deems there is a triggering event, and those with finite useful lives be amortized over their useful lives.
Details of the Company’s intangible assets are as follows:
March 31, 2022December 31, 2021
(In thousands)Gross Carrying
Amount
Accumulated
Amortization
Gross Carrying
Amount
Accumulated
Amortization
Assets eligible for amortization:     
Customer lists $4,778 $(4,371)$4,778 $(4,341)
Patents 72 (29)72 (28)
Software 2,844 (1,197)2,844 (1,104)
Trade Name 190 (25)190 (22)
Other 500 (333)500 (325)
Unamortized intangible assets:
Goodwill 14,262 — 14,262 — 
Total intangible assets $22,646 $(5,955)$22,646 $(5,820)
The customer lists are amortized over 7 and 10 years; the patents over 18 years; software over 3 years and 7 years, the trade name over 20 years and other intangible assets over 15 years. Amortization of intangible assets amounted to $135,000 and $215,000 for the three month periods ended March 31, 2022 and 2021, respectively. Estimated annual amortization of intangibles is $540,000 in both 2022 and 2023, $498,000 in 2024, $490,000 in 2025, and $342,000 in 2026.
Note 3 – Earnings Per Share
Basic earnings per share is computed by dividing net income by the weighted-average number of common shares outstanding. Diluted earnings per share is computed by dividing net income by the sum of the weighted-average number of
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common shares outstanding and the weighted-average number of potential common shares outstanding. Under the treasury stock method, stock appreciation rights (“SARs”) are dilutive when the average market price of the Company’s common stock, combined with the effect of any unamortized compensation expense, exceeds the SAR price during a period.
The calculations of basic and diluted earnings per share are as follows:
(In thousands except share and per
share data)
Three Months Ended
March 31,
20222021
Basic
Net income $8,258 $7,071 
Weighted-average common shares outstanding 13,577,991 14,312,260 
Basic earnings per share $.61 $.49 
 
Diluted
Net income $8,258 $7,071 
Weighted-average common shares outstanding 13,577,991 14,312,260 
Effect of dilutive restricted stock and stock appreciation rights 236,233 220,809 
Weighted-average common shares outstanding assuming dilution 13,814,224 14,533,069 
Diluted earnings per share $.60 $.49 
Note 4 – Stock Repurchases
The Company maintains a treasury stock buyback program pursuant to which, in October 2021, the Board of Directors authorized the repurchase of up to 750,000 shares of the Company’s common stock with no expiration date. As of March 31, 2022, 346,207 shares remained available for repurchase under the program. The Company repurchased 124,874 and 31,256 shares during the three-month periods ended March 31, 2022 and 2021, respectively. Repurchases may be made in the open market or through negotiated transactions from time to time depending on market conditions.
Note 5 – Industry Segment Information
The services provided by the Company are classified into two reportable segments: Information Services and Banking Services. Each of these segments provides distinct services that are marketed through different channels. They are managed separately due to their unique service and processing requirements.
The Information Services segment provides transportation, energy, telecommunication, and environmental invoice processing and payment services to large corporations. The Banking Services segment provides banking services primarily to privately held businesses and faith-based ministries, including on-line generosity services, as well as supporting the banking needs of the Information Services segment.
The Company’s accounting policies for segments are the same as those described in the summary of significant accounting policies in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021. Management evaluates segment performance based on tax-equivalized (as defined in the footnote to the chart on the following table) pre-tax income after allocations for corporate expenses. Transactions between segments are accounted for at what management believes to be fair value.
Substantially all revenue originates from, and all long-lived assets are located within, the United States and no revenue from any customer of any segment exceeds 10% of the Company’s consolidated revenue.
Funding sources represent average balances and deposits generated by Information Services and Banking Services and there is no allocation methodology used. Segment interest income is a function of the relative share of average funding sources generated by each segment multiplied by the following rates:
Information Services – one or more fixed rates depending upon the specific characteristics of the funding source, and
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Banking Services – a variable rate that is based upon the overall performance of the Company’s earning assets.
Any difference between total segment interest income and overall total Company interest income is included in Corporate, Eliminations, and Other.
Summarized information about the Company’s operations in each industry segment is as follows:
(In thousands)Information
Services
Banking
Services
Corporate,
Eliminations
and Other
Total
Three Months Ended March 31, 2022:
Fee income $29,234 $628 $568 $30,430 
Interest income* 6,326 6,482 (237)12,571 
Interest expense  223  223 
Intersegment income (expense)  1,133 (1,133)— 
Tax-equivalized pre-tax income* 7,815 2,850 56 10,721 
Goodwill 12,433 1,829  14,262 
Other intangible assets, net 307 2,122  2,429 
Total assets 1,090,737 1,345,958 (14,652)2,422,043 
Average funding sources 1,008,928 966,820  1,975,748 
Three Months Ended March 31, 2021:
Fee income $25,298 $317 $560 $26,175 
Interest income* 5,509 5,751 (122)11,138 
Interest expense  331  331 
Intersegment income (expense)  623 (623)— 
Tax-equivalized pre-tax income* 5,786 2,988 283 9,057 
Goodwill 12,433 1,829  14,262 
Other intangible assets, net 634 2,574  3,208 
Total assets 1,023,196 1,263,669 (70,292)2,216,573 
Average funding sources 837,852 849,177  1,687,029 
* Presented on a tax-equivalent basis assuming a tax rate of 21% for both 2022 and 2021. The tax-equivalent adjustment was approximately $446,000 and $462,000 for the First Quarter of 2022 and 2021, respectively.
Note 6 – Loans by Type
A summary of loans is as follows:
(In thousands)March 31,
2022
December 31,
2021
Commercial and industrial $469,129 $450,336 
Real estate:
Commercial:
Mortgage 101,018 108,759 
Construction 24,757 24,797 
Faith-based:
Mortgage 367,376 355,582 
Construction 13,512 14,664 
Paycheck Protection Program (“PPP”) 1,373 6,299 
Other37 130 
Total loans $977,202 $960,567 
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The following table presents the aging of loans past due by category at March 31, 2022 and December 31, 2021:
PerformingNonperforming
(In thousands)Current30-59
Days
60-89
Days
90
Days
and
Over
Non-
accrual
Total
Loans
March 31, 2022
Commercial and industrial $469,129 $ $ $ $ $469,129 
Real estate
Commercial:
Mortgage 101,018     101,018 
Construction 24,757     24,757 
Faith-based:
Mortgage 367,376     367,376 
Construction 13,512     13,512 
PPP 1,373     1,373 
Other37     37 
Total $977,202 $ $ $ $ $977,202 
December 31, 2021
Commercial and industrial $450,336 $ $ $ $ $450,336 
Real estate
Commercial:
Mortgage 108,759     108,759 
Construction 24,797     24,797 
Faith-based:
Mortgage 355,582     355,582 
Construction 14,664     14,664 
PPP 6,299     6,299 
Other130     130 
Total $960,567 $ $ $ $ $960,567 
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The following table presents the credit exposure of the loan portfolio by internally assigned credit grade as of March 31, 2022 and December 31, 2021:
(In thousands)
Loans
Subject to
Normal
Monitoring1
Performing
Loans Subject
to Special
Monitoring2
Nonperforming
Loans Subject
to Special
Monitoring2
Total Loans
March 31, 2022
Commercial and industrial $466,946 $2,183 $ $469,129 
Real estate
Commercial:
Mortgage 100,472 546  101,018 
Construction 24,757   24,757 
Faith-based:
Mortgage 366,397 979  367,376 
Construction 13,512   13,512 
PPP 1,373   1,373 
Other37   37 
Total $973,494 $3,708 $ $977,202 
December 31, 2021
Commercial and industrial $440,607 $9,729 $ $450,336 
Real estate
Commercial:
Mortgage 108,759   108,759 
Construction 24,797   24,797 
Faith-based:
Mortgage 352,717 2,865  355,582 
Construction 14,664   14,664 
PPP 6,299   6,299 
Other130   130 
Total $947,973 $12,594 $ $960,567 
1 Loans subject to normal monitoring involve borrowers of acceptable-to-strong credit quality and risk, who have the apparent ability to satisfy their loan obligations.
2 Loans subject to special monitoring possess some credit deficiency or potential weakness which requires a high level of management attention.
The Company had no loans evaluated for expected credit losses on an individual basis as of March 31, 2022 or December 31, 2021. There were no foreclosed loans recorded as other real estate owned (included in other assets) as of March 31, 2022 or December 31, 2021. There were no loans considered troubled debt restructurings as of March 31, 2022 or December 31, 2021.
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A summary of the activity in allowance for credit losses (“ACL”) by category for the periods ended March 31, 2022 and December 31, 2021 is as follows:
(In thousands)C&ICREFaith-based
CRE
ConstructionTotal
Balance at December 31, 2020
$4,635 $1,175 $5,717 $417 $11,944 
Provision for (release of) credit losses 387 (144)(48)(125)70 
Recoveries 12  15  27 
Balance at December 31, 2021
$5,034 $1,031 $5,684 $292 $12,041 
Provision for (release of) credit losses 245 (55)180 (5)365 
Recoveries      
Balance at March 31, 2022
$5,279 $976 $5,864 $287 $12,406 
The provision for credit losses during the period ended March 31, 2022 was primarily due to the increase in loan balances.
Note 7 – Commitments and Contingencies
In the normal course of business, the Company is party to activities that contain credit, market and operational risks that are not reflected in whole or in part in the Company’s consolidated financial statements. Such activities include traditional off-balance sheet credit-related financial instruments and commitments under operating leases. These financial instruments include commitments to extend credit, commercial letters of credit and standby letters of credit. The Company’s maximum potential exposure to credit loss in the event of nonperformance by the other party to the financial instrument for commitments to extend credit, commercial letters of credit and standby letters of credit is represented by the contractual amounts of those instruments. A release of credit losses of $135,000 was recorded during the three months ended March 31, 2022 primarily due to a decrease in unfunded commitments. An allowance for unfunded commitments of $232,000 and $367,000 had been recorded at March 31, 2022 and December 31, 2021, respectively.
Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commercial and standby letters of credit are conditional commitments issued by the Company or its subsidiaries to guarantee the performance of a customer to a third party. These off-balance sheet financial instruments generally have fixed expiration dates or other termination clauses and may require payment of a fee. At March 31, 2022, the balances of unused loan commitments, standby and commercial letters of credit were $200,547,000, $12,297,000, and $1,208,000, respectively. Since some of the financial instruments may expire without being drawn upon, the total amounts do not necessarily represent future cash requirements. Commitments to extend credit and letters of credit are subject to the same underwriting standards as those financial instruments included on the consolidated balance sheets. The Company evaluates each customer’s credit worthiness on a case-by-case basis. The amount of collateral obtained, if deemed necessary upon extension of the credit, is based on management’s credit evaluation of the borrower. Collateral held varies, but is generally accounts receivable, inventory, residential or income-producing commercial property or equipment. In the event of nonperformance, the Company or its subsidiaries may obtain and liquidate the collateral to recover amounts paid under guarantees on these financial instruments.
Note 8 – Stock-Based Compensation
The Amended and Restated Omnibus Stock and Performance Compensation Plan (the “Omnibus Plan”) permits the issuance of up to 1,500,000 shares of the Company’s common stock in the form of stock options, SARs, restricted stock, restricted stock units and performance awards. The Company may issue shares out of treasury stock for these awards. During the three months ended March 31, 2022, 40,462 restricted shares, 57,542 performance-based restricted shares, and no SARs were granted under the Omnibus Plan. Stock-based compensation expense for the three months ended March 31, 2022 and 2021 was $1,090,000 and $693,000, respectively.
Restricted Stock
Restricted shares granted to Company employees are amortized to expense over a three-year cliff vesting period. Restricted shares granted to members of the Board of Directors are amortized to expense over a one-year service period, with the exception of those shares granted in lieu of cash payments for retainer fees which are expensed in the period earned.
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As of March 31, 2022, the total unrecognized compensation expense related to non-vested restricted shares was $2,625,000, and the related weighted-average period over which it is expected to be recognized is approximately 1.01 years.
Following is a summary of the activity of the Company's restricted stock for the three months ended March 31, 2022, with total shares and weighted average fair value:
Three Months Ended
March 31, 2022
SharesFair Value
Balance at December 31, 2021
165,553 $44.81 
Granted