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Employee Benefit Plans

9 Months Ended

Sep. 30, 2024

Employee Benefit Plans

Employee Benefit Plans

NOTE 10. Employee Benefit Plans

Stock Option Plans

The Company has maintained option plans and maintains an equity incentive plan, which allows for the grant of options to officers, employees and members of the Board of Directors. Grants of options under the Company’s plans generally vest over 3 years and must be exercised within 10 years of the date of grant. Transactions under the Company’s plans for the nine months ended September 30, 2024 are summarized in the following table:


							Weighted
				Weighted			average
				average			remaining		Aggregate
				exercise			contractual		intrinsic
		Shares		price			life in years		value
Outstanding at December 31, 2023		471,132		$	17.92		4.9		$	5,500,080
Options granted		—			—
Options exercised		(80,633)			15.22
Options forfeited		—			—
Options expired		—			—
Outstanding at September 30, 2024		390,499		$	18.47		4.3		$	6,087,186
Exercisable at September 30, 2024		390,499		$	18.47		4.3		$	6,087,186

On May 5, 2023, the Company adopted the 2023 Equity Compensation Plan providing for grants of up to 500,000 shares to be allocated between incentive and non-qualified stock options, restricted stock awards, performance units and deferred stock. The Plan, along with the 2019 Equity Compensation Plan adopted on April 25, 2019, replaced all previously approved and established equity plans then currently in effect. As of September 30, 2024, 281,500 options and 345,850 shares of restricted stock have been awarded from the plans. In addition, 16,162 unvested options and 22,412 unvested shares of restricted stock were cancelled and returned to the plans leaving 405,799 shares available for future grants.

The fair values of the options granted are estimated on the date of grant using the Black-Scholes option-pricing model. There were no options granted during the nine months ended September 30, 2024 or 2023.

Upon exercise, the Company issues shares from its authorized but unissued common stock to satisfy the options. The following table presents information about options exercised during the three and nine months ended September 30, 2024 and 2023:


		For the three months ended September 30,						For the nine months ended September 30,
		2024			2023			2024			2023
Number of options exercised			15,533			22,249			80,633			73,184
Total intrinsic value of options exercised		$	304,943		$	164,978		$	1,109,805		$	480,981
Cash received from options exercised		$	186,497		$	394,665		$	1,227,506		$	1,393,551
Tax deduction realized from options		$	85,719		$	49,634		$	311,966		$	144,703

The following table summarizes information about stock options outstanding and exercisable at September 30, 2024:


	Options outstanding								Options exercisable
				Weighted average		Weighted					Weighted
		Options		remaining contractual		average			Options		average
Range of exercise prices		outstanding		life (in years)		exercise price			exercisable		exercise price
8.31-11.87		47,000		1.1		$	9.79		47,000		$	9.79
11.88-15.44		9,000		2.2			14.60		9,000			14.60
15.45-19.01		127,599		4.9			17.57		127,599			17.57
19.02-22.57		206,900		4.8			21.17		206,900			21.17
Total		390,499		4.3		$	18.47		390,499		$	18.47

FASB ASC Topic 718, “Compensation - Stock Compensation,” requires an entity to recognize the fair value of equity awards as compensation expense over the period during which an employee is required to provide service in exchange for such an award (vesting period). Compensation expense related to stock options and the related income tax benefit for the three and nine months ended September 30, 2024 and 2023 are detailed in the following table:


		For the three months ended September 30,						For the nine months ended September 30,
(In thousands)		2024			2023			2024			2023
Compensation expense		$	—		$	72		$	32		$	236
Income tax benefit		$	—		$	21		$	9		$	68

As of September 30, 2024, there was no unrecognized compensation costs related to nonvested share-based stock option compensation arrangements granted under the Company’s plans as all options were fully vested.

Restricted Stock Awards

Restricted stock is issued under the Company’s active Equity Compensation Plans to reward employees and directors and to retain them by distributing stock over a period of time. Restricted stock awards granted to date generally vest over a period of 4 years and are recognized as compensation to the recipient over the vesting period. The awards are recorded at fair market value at the time of grant and amortized into salary expense on a straight line basis over the vesting period. The following table summarizes nonvested restricted stock activity for the nine months ended September 30, 2024:


				Average grant
		Shares		date fair value
Nonvested restricted stock at December 31, 2023		164,634		$	24.46
Granted		77,950			28.84
Cancelled		(7,162)			26.83
Vested		(48,125)			23.53
Nonvested restricted stock at September 30, 2024		187,297		$	26.43

Restricted stock awards granted during the three and nine months ended September 30, 2024 and 2023 were as follows:


		For the three months ended September 30,						For the nine months ended September 30,
		2024			2023			2024			2023
Number of shares granted			—			3,000			77,950			58,500
Average grant date fair value		$	—		$	25.24		$	28.84		$	22.93

Compensation expense related to restricted stock for the three and nine months ended September 30, 2024 and 2023 is detailed in the following table:


		For the three months ended September 30,						For the nine months ended September 30,
(In thousands)		2024			2023			2024			2023
Compensation expense		$	455		$	357		$	1,349		$	1,033
Income tax benefit		$	128		$	103		$	379		$	298

As of September 30, 2024, there was approximately $3.8 million of unrecognized compensation cost related to nonvested restricted stock awards granted under the Company’s equity plans. That cost is expected to be recognized over a weighted average period of 2.6 years.