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STOCK-BASED COMPENSATION PLANS

12 Months Ended

Dec. 31, 2023

STOCK-BASED COMPENSATION PLANS

STOCK-BASED COMPENSATION PLANS

NOTE 13. STOCK-BASED COMPENSATION PLANS

We have several stock-based compensation plans that allow for grants of restricted stock, restricted shares, performance share units, performance shares and restricted stock units to our employees and non-employee directors. Our stock-based compensation plans are administered by the Compensation Committee of the Board of Directors. For the years ended December 31, 2023, 2022 and 2021, all common stock issuances in connection with stock-based compensation arrangements were issued from unissued shares. As of December 31, 2023, total shares authorized under the stock-based compensation 2019 plan for employees and directors were 500,000 shares, of which 217,435 shares were available for future grants.

Compensation expense recognized in connection with the stock-based compensation plans are presented in the following table for the years ended December 31, 2023, 2022, and 2021:


(in thousands)		2023			2022			2021
Stock options		$	—		$	—		$	—
Restricted stock awards			868			578			357
Performance stock units			857			181			317
Restricted stock units			800			1,098			1,391
Total compensation expense		$	2,525		$	1,857		$	2,065

Tax benefits recognized from stock-based compensation plans for the years ended December 31, 2023, 2022, and 2021 are, as follows:


(in thousands)		2023			2022			2021
Stock options⁽¹⁾		$	17		$	22		$	77
Restricted stock awards			201			136			84
Performance stock units			204			43			79
Restricted stock units			193			274			344
Total tax benefit		$	615		$	475		$	584

⁽¹⁾ We do not receive a tax benefit on this plan until disqualifying dispositions are made.

Stock Options

A summary of stock options as of December 31, 2023 and 2022, and changes during the year then ended is presented below:


		Number of		Weighted			Aggregate
		Stock Options		Average			Intrinsic Value
Stock Options		Outstanding		Exercise Price			(in thousands)
Outstanding at January 1, 2023		47,327		$	21.47
Granted		—			—
Exercised		(8,166)			20.64
Forfeited		—			—
Expired		(3,323)			16.99
Outstanding at December 31, 2023		35,838		$	22.08		$	261

Ending vested and expected to vest December 31, 2023		35,838		$	22.08		$	261
Exercisable at December 31, 2023		35,838			22.08			261


		Number of		Weighted			Aggregate
		Stock Options		Average			Intrinsic Value
Stock Options		Outstanding		Exercise Price			(in thousands)
Outstanding at January 1, 2022		57,964		$	20.89
Granted		—			—
Exercised		(10,637)			18.29
Forfeited		—			—
Expired		—			—
Outstanding at December 31, 2022		47,327		$	21.47		$	500

Ending vested and expected to vest December 31, 2022		47,327		$	21.47		$	500
Exercisable at December 31, 2022		47,327			21.47			500

All outstanding options were fully vested with no unrecognized compensation cost as of December 31, 2021. The intrinsic value of the options exercised for the years ended December 31, 2023, 2022, and 2021, was approximately $74 thousand, $94 thousand and $331 thousand, respectively. The weighted average remaining contractual term of outstanding options is approximately 1.6 years.

Restricted Stock Awards

Restricted stock awards (“RSAs”) are granted to certain directors and executive officers and vest immediately. A summary of RSAs as of December 31, 2023 and 2022, and changes during the year then ended is presented below:


		Number of
		Restricted Stock		Weighted Average
		Awards		Grant Date Fair
Restricted Stock Awards		Outstanding		Value
Outstanding at January 1, 2023		24,824		$	28.49
Awarded		39,585			29.16
Vested		(23,235)			27.36
Forfeited		—			—
Outstanding at December 31, 2023		41,174		$	29.78



		Number of
		Restricted Stock		Weighted Average
		Awards		Grant Date Fair
Restricted Stock Awards		Outstanding		Value
Outstanding at January 1, 2022		—		$	—
Awarded		39,267			29.21
Vested		(14,443)			30.46
Forfeited		—			—
Outstanding at December 31, 2022		24,824		$	28.49

Unrecognized expense for non-vested RSAs totaled $370 thousand as of December 31, 2023, which is expected to be recognized over the weighted average remaining contractual maturity term of 3.0 years.

Performance Stock Units

We have a long-term incentive plan where performance unit awards (“PSUs”) are granted to certain executive officers providing the opportunity to earn shares of common stock of the Company based on our performance compared to peers. Participants in the plan were collectively granted PSUs ranging from zero to 43,247 in 2023 and from zero to 43,800 in 2022. The PSUs granted will vest only if the performance measures are achieved over a three year performance period. Failure to achieve the performance measures will result in all or a portion of shares being forfeited. On the grant dates in 2023 and 2022, PSUs had a weighted average fair value per share of $30.64 and $28.49, respectively. Expense is recognized over the performance period and is adjusted for changes in probability of the Company achieving profitability metrics.

The following table summarizes PSUs at target as of December 31, 2023 and 2022:


		Number of		Weighted Average
		Performance Stock		Grant Date Fair
Performance Stock Units		Units Outstanding		Value
Nonvested at January 1, 2023		78,435		$	25.70
Awarded		28,831			30.64
Vested and exercised		(15,601)			25.29
Forfeited		(6,750)			25.30
Nonvested at December 31, 2023		84,915		$	27.53


		Number of		Weighted Average
		Performance Stock		Grant Date Fair
Performance Stock Units		Units Outstanding		Value
Nonvested at January 1, 2022		70,465		$	23.88
Awarded		29,200			28.49
Vested and exercised		—			—
Forfeited		(21,230)			23.35
Nonvested at December 31, 2022		78,435		$	25.70

Unrecognized expense for non-vested PSUs totaled $1.3 million as of December 31, 2023, which is expected to be recognized over the weighted average remaining contractual maturity term of 2.8 years. PSUs do not carry an exercise price and therefore have no intrinsic value as of December 31, 2023.

Restricted Stock Units

During 2023 and 2022, restricted stock units (“RSUs”) were granted to certain executive officers and senior vice presidents. Awards to executives vest annually over 3 years while awards to senior vice presidents cliff vest at the end of three years. The RSUs granted were valued at $29.36 for 2023 and between $28.49 and $29.34 for 2022 the fair value at the date of grant and are expensed over three years.

The following table summarizes RSUs activity in 2023 and 2022:


		Number of		Weighted Average
		Restricted Stock		Grant Date Fair
		Units Outstanding		Value
Outstanding at January 1, 2023		115,816		$	25.25
Granted		36,354			26.12
Vested and exercised		(43,341)			21.77
Forfeited		(6,134)			25.84
Outstanding at December 31, 2023		102,695		$	27.07


		Number of		Weighted Average
		Restricted Stock		Grant Date Fair
		Units Outstanding		Value
Outstanding at January 1, 2022		133,617		$	23.48
Granted		36,468			28.51
Vested and exercised		(43,059)			22.88
Forfeited		(11,210)			23.46
Outstanding at December 31, 2022		115,816		$	25.25

RSUs include cash-based restricted stock units (“CRSUs”), total CRSUs vested and exercised during 2023 and 2022 were 29,043 and 24,232 shares, respectively. Unrecognized expense for non-vested RSUs totaled $1.5 million as of December 31, 2023, which is expected to be recognized over the weighted average remaining contractual maturity term of 3.0 years.

Employee Stock Purchase Plan

We maintain an employee stock purchase plan (“ESPP”) under which employees, through payroll deductions, are able to purchase shares of Company’s common stock. The purchase price is 92% of the lower of the market price on the first or last day of the offering period. The maximum number of shares issuable during any offering period is 200,000 shares; however, as of December 31, 2023, December 31, 2022 and December 31, 2021, there were 177,415, 179,079 and 167,502 shares available for issuance under the ESPP, respectively. Participants may not purchase more than 400 shares during any offering period and, in any event, no more than $25 thousand worth of common stock in any calendar year. The ESPP has been determined to be non-compensatory in nature. As a result, we expect that expenses related to the ESPP will not be material. During the years ended December 31, 2023, 2022 and 2021, there were 22,585, 20,921 and 19,481 shares of common stock issued under the ESPP, respectively.