Stock-Based Compensation Plans

12 Months Ended

Dec. 31, 2024

Share-Based Payment Arrangement [Abstract]

Stock-Based Compensation Plans.

The Company has two stock-based compensation plans (the 2006 Stock Incentive Plan and the 2016 Equity Incentive Option Plan) under which equity compensation has been granted to directors, officers and key employees. The 2016 plan permits the grant of stock options, stock appreciation rights, restricted stock awards, restricted stock units, or stock awards. The options awarded under the plans have similar characteristics. All stock options are non-qualified and expire ten years from the date of grant. Stock based compensation awarded to directors, officers and employees are exercisable immediately or become exercisable in cumulative installments of 20% or 25% at the end of each year following the date of grant. When stock options are exercised the Company issues new shares after receipt of exercise proceeds and taxes due, if any, from the grantee.

The Company utilizes the Black-Scholes valuation model for estimating fair value of stock compensation for options awarded to officers and employees. Each grant is evaluated based upon assumptions at the time of grant. The assumptions were no dividend yield, expected volatility between 28.45% and 41.17%, risk-free interest rate of 2.0% to 3.8% and expected life of 5.0 to 7.0 years.

The dividend yield of zero is based on the fact that the Company does not pay cash dividends and has no present intention to pay cash dividends. Expected volatility is estimated based on the Company’s historical experience over a period equivalent to the expected life in years. The risk-free interest rate is based on the U.S. Treasury constant maturity interest rate at the date of grant with a term consistent with the expected life of the

options granted. The expected life calculation is based on the observed and expected time to exercise options by the employees.

In January 2024, 12,200 shares of stock options were granted to an employee that will vest over the next four years. In January 2024, 20,330 shares of stock options were granted to an employee as part of a long-term incentive plan that will vest over the next five years. In January and May 2024, 12,780 shares of restricted stock were granted to employees that will vest over the next four years. In January and May 2024, 23,186 shares of restricted stock were granted to employees as part of a long-term incentive plan that will vest over the next five years. In March 2024, 6,704 shares of restricted stock were granted to employees under the terms of the 2022 long-term incentive plan. In January 2023, 15,960 shares of restricted stock were granted to employees that will vest over the next four years. In January 2023, 30,064 shares of restricted stock were granted to employees as part of a long-term incentive plan that will vest over the next five years. In March 2023, 4,544 shares of restricted stock were granted to employees under the terms of the 2021 long-term incentive plan. In January 2022, 14,896 shares of restricted stock were granted to employees that will vest over the next four years. In January 2022, 28,032 shares of restricted stock were granted to employees as part of a long-term incentive plan that will vest over the next five years. The number of common shares available for future issuance was 567,014 at December 31, 2024. In January 2023 and January 2022, 1,856 and 1,730 shares of stock, respectively, were granted to employees.

The Company recorded the following stock compensation expense in its consolidated statements of income (in thousands):


	Years Ended December 31,
	2024		2023	2022
Stock option grants	$	78	60	69
Restricted stock awards	1,279		1,028	800
Employee stock grant	—		50	50
Annual director stock award	600		600	650
	$	1,957	1,738	1,569

A summary of changes in outstanding options is presented below (in thousands, except share and per share amounts):


Options	Number of Shares	Weighted Average Exercise Price		Weighted Average Remaining Term (yrs)	Weighted Average Grant Date Fair Value(000's)
Outstanding at
January 1, 2022	209,510	$	18.97	4.8	$	1,416
Exercised	(32,920)	$	12.54		$	(145)
Outstanding at
December 31, 2022	176,590	$	20.17	4.4	$	1,271
Exercised	(49,710)	$	20.61		$	(290)
Outstanding at
December 31, 2023	126,880	$	20.00	3.5	$	981
Granted	32,530	$	31.44	9.0	$	400
Exercised	(16,420)	$	13.48		$	(100)
Outstanding at
December 31, 2024	142,990	$	23.35	4.2	$	1,281
Exercisable at
December 31, 2024	113,510	$	21.25	3.0	$	918
Vested during twelve months ended
December 31, 2024	3,050				$	37

The following table summarizes information concerning stock options outstanding at December 31, 2024:


Range of Exercise Prices per Share	Shares under Option	Weighted Average Exercise Price		Weighted Average Remaining Life

$15.57 - $18.76	14,840	15.58		0.9
$18.77 - $22.24	24,000	19.23		2.0
$22.25 - $22.99	71,620	22.66		3.5
$23.00 - $31.44	32,530	31.44		9.0
Total	142,990	$	23.35	4.2	Years

The aggregate intrinsic value of exercisable in-the-money options was $1,068,000 and the aggregate intrinsic value of outstanding in-the-money options was $1,068,000 based on the market closing price of $30.63 on December 31, 2024 less exercise prices.

Gains of $295,000 were realized by option holders during the year ended December 31, 2024.

A summary of changes in restricted stock awards is presented below (in thousands, except share and per share amounts):


Restricted stock	Number Of Shares	Weighted Average Exercise Price		Weighted Average Remaining Term (yrs)	Weighted Average Grant Date Fair Value(000's)

Non-vested at January 1, 2022	92,148	$	22.94	3.1	$	2,114
Time-based awards granted	14,896	28.90			431
Performance-based awards granted	28,032	28.90			810
Forfeited	(2,726)	23.15			(63)
Vested	(31,358)	23.78			(746)
Non-vested at December 31, 2022	100,992	$	25.21	3.0	$	2,546
Time-based awards granted	15,960	26.93			430
Performance-based awards granted	34,608	26.96			933
Vested	(42,106)	24.03			(1,012)
Non-vested at December 31, 2023	109,454	$	26.47	2.8	$	2,897
Time-based awards granted	12,780	31.30			400
Performance-based awards granted	29,890	31.06			928
Vested	(49,446)	48.06			(1,305)
Non-vested at December 31, 2024	102,678	$	28.44	2.7	$	2,920

Total unrecognized compensation cost of restricted stock granted but not yet vested as of December 31, 2024 was $2,412,000 which is expected to be recognized over a weighted-average period of 2.6 years.