CPSI 2017 Annual Report

78 In the event that the Company's financial performance meets the predetermined target for the performance criteria, the Company will issue each award recipient the number of restricted shares equal to the target award specified in the individual's underlying performance share award agreement. In the event the financial results of the Company exceed the predetermined target, additional shares up to the maximum award may be issued. In the event the financial results of the Company fall below the predetermined target, a reduced number of shares may be issued. If the financial results of the Company fall below the threshold performance level, no shares will be issued. The recipients of performance share awards do not receive dividends or possess voting rights during the performance period and, accordingly, the fair value of the performance share awards is the quoted market value of the Company stock on the grant date less the present value of the expected dividends not received during the relevant period. Expense is recognized using the accelerated attribution (graded vesting) method over the period beginning on the date the Company determines that it is probable that the performance criteria will be achieved and ending on the last day of the vesting period for the restricted stock issued in satisfaction of such awards. In the event the Company determines it is no longer probable that the minimum performance level will be achieved, all previously recognized compensation expense related to the applicable awards is reversed in the period such a determination is made. A summary of performance share award activity under the 2014 Incentive Plan for the years ended December 31, 2017, 2016 and 2015, is as follows, based on the target award amounts set forth in the performance share award agreements: Shares Weighted- Average Grant-Date Fair Value Performance share awards outstanding at January 1, 2015. . . . . . . . . . . . . . . . . . . . . . . . 46,541 $ 60.28 Granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52,364 49.29 Forfeited or unearned . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3,590) 51.42 Performance share awards converted to restricted stock . . . . . . . . . . . . . . . . . . . . . . . . . (45,844) 60.28 Performance share awards outstanding at December 31, 2015. . . . . . . . . . . . . . . . . . . . . 49,471 $ 49.29 Granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77,594 49.64 Forfeited or unearned . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (49,471) 49.29 Performance share awards converted to restricted stock . . . . . . . . . . . . . . . . . . . . . . . . . — — Performance share awards outstanding at December 31, 2016. . . . . . . . . . . . . . . . . . . . . 77,594 $ 49.64 Granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 189,325 29.94 Forfeited or unearned . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (77,594) 49.64 Performance share awards converted to restricted stock . . . . . . . . . . . . . . . . . . . . . . . . . — — Performance share awards outstanding at December 31, 2017. . . . . . . . . . . . . . . . . . . . . 189,325 $ 29.94 9. CONCENTRATION OF CREDIT RISK Financial instruments, which potentially subject the Company to concentration of credit risk, consist principally of temporary cash investments and trade receivables (including financing receivables). The Company places its temporary cash investments with credit-worthy, high-quality financial institutions. The Company’s customer base is concentrated in the healthcare industry. Customers are located throughout the United States. The Company requires no collateral or other security to support customer trade receivables. An allowance for doubtful accounts and allowance for credit losses has been established for potential credit losses based on historical collection experience. The Company maintains its cash and cash equivalents in bank deposit accounts, which, at times, may exceed federally insured limits. The Company has not experienced any losses in such accounts and does not believe it is exposed to any significant credit risk on cash and cash equivalents. 10. FINANCING RECEIVABLES During 2017, total financing receivables increased by $15.4 million to $26.5 million as of December 31, 2017, compared with $11.1 million as of December 31, 2016. The increase in financing arrangements is primarily due to two reasons; meaningful use stage 3 installations are primarily financed through short-term payment plans, and competitor financing