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Note 13 - Employee and Director Benefits

12 Months Ended

Dec. 31, 2023

Notes to Financial Statements

Share-Based Payment Arrangement [Text Block]

NOTE 13. EMPLOYEE AND DIRECTOR BENEFITS

The Company has a stock incentive plan, which is described below. The compensation cost that has been charged against income for the plan was approximately $3.6 million, $3.2 million and $1.9 million for the years ended December 31, 2023, 2022 and 2021, respectively.

Stock Incentive Plan

On March 23, 2009, the Company’s board of directors adopted the 2009 Stock Incentive Plan (the “Plan”), which was effective upon approval by the stockholders at the 2009 Annual Meeting of Stockholders. The 2009 Plan originally permitted the grant of up to 2,550,000 shares of common stock. However, upon stockholder approval during 2014, the Plan was amended in order to allow the Company to grant stock options for up to 5,550,000 shares of common stock. The Plan authorizes the grant of stock appreciation rights, restricted stock, incentive stock options, non-qualified stock options, non-stock share equivalents, performance shares or performance units and other equity-based awards. Option awards are generally granted with an exercise price equal to the fair market value of the Company’s stock at the date of grant.

As of December 31, 2023, there are a total of 3,031,065 shares available to be granted under the Plan.

Stock-based compensation expense for stock-based awards is based on the grant-date fair value. For stock option awards, the fair value is estimated at the date of grant using the Black-Scholes-Merton valuation model. This model requires the input of highly subjective assumptions, changes to which can materially affect the fair value estimate. The Black-Scholes-Merton model is based on the weighted-average assumptions for expected dividend yield, expected stock price volatility, risk-free interest rate and expected life of options granted.

There were no grants of stock options during the years ended December 31, 2023, 2022, and 2021.

The following tables summarize stock option activity:

		Shares				Weighted Average Exercise Price				Weighted Average Remaining Contractual Term (years)				Aggregate Intrinsic Value
														(In Thousands)
Year Ended December 31, 2023:
Outstanding at beginning of year			280,000			$	19.43				3.0			$	14,088
Exercised			(112,200	)			11.84				0.7				6,148
Forfeited			(2,000	)			34.64				5.1				64
Outstanding at end of year			165,800				24.35				2.9				7,211

Exercisable at December 31, 2023:			143,300			$	21.84				2.2			$	6,419

Year Ended December 31, 2022:
Outstanding at beginning of year			353,250			$	19.28				3.8			$	23,525
Exercised			(70,500	)			17.96				2.2				3,592
Forfeited			(2,750	)			37.94				5.4				85
Outstanding at end of year			280,000				19.43				3.0				14,088

Exercisable at December 31, 2022:			220,500			$	14.37				2.0			$	12,279

Year Ended December 31, 2021:
Outstanding at beginning of year			641,450			$	18.15				4.6			$	16,985
Exercised			(278,200	)			12.58				2.8				20,131
Forfeited			(10,000	)			38.38				5.2				466
Outstanding at end of year			353,250				19.28				3.8				23,525

Exercisable at December 31, 2021:			264,000			$	12.89				2.8			$	19,353

Exercisable options at December 31, 2023 were as follows:

Range of Exercise Price				Shares				Weighted Average Exercise Price				Weighted Average Remaining Contractual Term (years)				Aggregate Intrinsic Value
																(In Thousands)
$	6.00 - 7.00				7,500				6.92				0.1				448
	15.00 - 16.00				42,800				15.52				1.1				2,188
	17.00 - 18.00				21,500				17.17				1.3				1,063
	18.00 - 19.00				6,000				18.49				1.7				289
	19.00 - 20.00				24,000				19.16				2.1				1,139
	25.00 - 26.00				4,000				25.41				2.7				165
	33.00-34.00				2,000				33.48				5.0				66
	35.00-36.00				25,000				35.65				4.8				775
	38.00 - 39.00				8,000				38.29				3.1				227
	41.00 - 42.00				1,000				41.21				4.1				25
	43.00 - 44.00				1,500				43.80				4.5				34
					143,300			$	21.84				2.2			$	6,419

As of December 31, 2023, there was $52,000 of total unrecognized compensation cost related to non-vested stock options. As of December 31, 2023, non-vested stock options had a weighted average remaining time to vest of 8 months.

Restricted Stock and Performance Shares

The Company periodically grants restricted stock awards that vest upon service conditions. Dividend payments are made during the vesting period. The value of restricted stock is determined to be the current value of the Company’s stock, and this total value will be recognized as compensation expense over the vesting period. As of December 31, 2023, there was $5.1 million of total unrecognized compensation cost related to non-vested restricted stock. As of December 31, 2023, non-vested restricted stock had a weighted average remaining time to vest of 2.1 years.

The Company periodically grants PSUs that give plan participants the opportunity to earn between 0% and 150% of the number of PSUs granted based on achieving certain performance metrics. The number of stock units earned upon vesting of PSUs is determined by reference to the Company’s total stockholder return relative to a peer group of other publicly traded banks and bank holding companies during the performance period. The performance period is generally three years starting on the grant date. The fair value of PSUs is determined using a Monte Carlo simulation model on the grant date. As of December 31, 2023, there was $744,000 of total unrecognized compensation cost related to non-vested PSUs. As of December 31, 2023, non-vested performance stock had a weighted average remaining time to vest of 1.0 year.

The following table summarizes restricted stock and PSU activity:

		Restricted Stock								PSU
		Shares				Weighted Average Grant Date Fair Value				Shares				Weighted Average Grant Date Fair Value
Year Ended December 31, 2023:
Non-vested at beginning of year			141,580			$	56.39				23,852			$	54.16
Granted			64,880				58.45				8,092				70.29
Vested			(35,163	)			49.85				-				-
Forfeited			(12,999	)			63.78				-				-
Non-vested at end of year			158,298				58.08				31,944				58.25

Year Ended December 31, 2022:
Non-vested at beginning of year			126,975			$	42.74				12,437			$	37.05
Granted			53,974				83.24				11,415				72.81
Vested			(28,160	)			43.27				-				-
Forfeited			(11,209	)			58.82				-				-
Non-vested at end of year			141,580				56.39				23,852				54.16

Year Ended December 31, 2021:
Non-vested at beginning of year			84,307			$	34.93				-			$	-
Granted			69,295				48.92				12,437				37.05
Vested			(14,274	)			29.33				-				-
Forfeited			(12,353	)			39.60				-				-
Non-vested at end of year			126,975				42.74				12,437				37.05

Retirement Plans

The Company has a retirement savings 401(k) and profit-sharing plan in which all employees 21 years of age and older may participate after completion of one year of service. The Company matches employees’ contributions based on a percentage of salary contributed by participants and may make additional discretionary profit-sharing contributions. The Company’s expense for the plan was $2.1 million, $1.8 million, and $1.6 million for 2023, 2022 and 2021, respectively.