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Note 10 - Stock-based Compensation | 12 Months Ended
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Dec. 31, 2024
Notes to Financial Statements |
Share-Based Payment Arrangement [Text Block] | NOTE 10 – STOCK-BASED COMPENSATION Stock-based compensation plans are used to provide directors and employees with an increased incentive to contribute to our long-term performance and growth, to align the interests of directors and employees with the interests of our shareholders through the opportunity for increased stock ownership and to attract and retain directors and employees. Stock-based compensation, reported as noninterest expense in the Consolidated Statements of Income, totaled $3.3 million, $3.4 million and $3.4 million in 2024, 2023 and 2022, respectively. The Stock Incentive Plan of 2020 was approved by shareholders in May, 2020, and was effectively replaced with the Stock Incentive Plan of 2023 that was approved by shareholders in May, 2023. Grants included on the following tables were made under the various Stock Incentive Plans as follows:
| ● | Stock Incentive Plan of 2020
| o | Restricted stock grants in 2021 and 2022
| ● | Stock Incentive Plan of 2023
| o | Restricted stock grants in 2023
In addition, stock grants to directors as retainer payments during the years 2020 through 2022 were from the Stock Incentive Plan of 2020, while stock grants to directors as retainer payments during 2024 and 2023 were from the Stock Incentive Plan of 2023. Under the Stock Incentive Plan of 2020 and the Stock Incentive Plan of 2023, incentive awards may include, but are not limited to, stock options, restricted stock, stock appreciation rights and stock awards. Incentive awards that are stock options or stock appreciation rights are granted with an exercise price not less than the closing price of our common stock on the date of grant. Price, vesting and expiration date parameters are determined by Mercantile’s Compensation Committee on a grant-by-grant basis. No payments are required from employees for restricted stock awards. The restricted stock awards granted during the years 2021 through 2023 fully vest after three years and, in the case of performance-based restricted stock issued to executive officers in 2020 through 2023, are subject to the attainment of pre-determined performance goals. At year-end 2024, there were approximately 383,000 shares authorized for future incentive awards. A summary of restricted stock activity during the year ended December 31, 2024 is as follows:
|  |  |  |  |  | Weighted |
|  |  |  |  |  | Average |
|  | Shares |  |  | Fair Value |
Nonvested at beginning of year |  |  | 355,890 |  |  | $ | 34.18 |
Vested |  |  | (115,762 | ) |  |  | 32.02 |
Forfeited |  |  | (11,482 | ) |  |  | 34.09 |
Nonvested at end of year |  |  | 228,646 |  |  | $ | 35.84 |
Of the restricted stock shares granted in 2023 and 2022, a total of 25,239 shares and 26,112 shares, respectively, are performance-based awards made to our Named Executive Officers at the target level and are subject to the attainment of pre-determined performance goals. We periodically grant shares of common stock to our Corporate and Bank Board Directors for retainer payments with the related expense being recorded over the period of the Directors' service, as summarized below:
|  |  |  |  |  | Total Cost |  |
Grant Year |  | Shares Granted |  |  | (in thousands) |  | Covered Period
2021 |  |  | 10,489 |  |  | $ | 344 |  | June 1, 2021 - May 31, 2022
2022 |  |  | 11,166 |  |  |  | 359 |  | June 1, 2022 - May 31, 2023
2023 |  |  | 11,529 |  |  |  | 350 |  | June 1, 2023 - May 31, 2024
2024 |  |  | 11,316 |  |  |  | 423 |  | June 1, 2024 - May 31, 2025

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