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Stock-Based Compensation
 12 Months Ended
Dec. 31, 2024
Share-Based Payment Arrangement [Abstract]  
Stock-Based Compensation

NOTE 19 – Stock-Based Compensation

The Company utilizes certain stock incentive plans as long-term retention programs intended to attract, retain, and provide incentives for key employees and non-employee directors in the form of incentive and non-qualified stock options, restricted stock, and restricted stock units. Shares are granted under plans approved by the Company’s shareholders. As of December 31, 2024, there were 258,622 shares available for grant under the 2020 Southern First Bancshares, Inc. Equity Incentive Plan.

Compensation cost is recognized for stock options and restricted stock awards issued to employees and non-employee directors and is measured as the fair value of these awards on their date of grant.  A Black-Scholes model is utilized to estimate the fair value of stock options, while the market price of the Company’s common stock at the date of grant is used as the fair value of restricted stock awards.  Compensation cost is recognized over the required service period, generally defined as the vesting period for stock option and restricted stock awards. 

Stock-based compensation expense was recorded as follows:

            
   For the years ended December 31, 
(dollars in thousands)  2024   2023   2022 
Stock option expense  $374    528    927 
Restricted stock grant expense   1,909    1,415    1,099 
Total stock-based compensation expense  $2,283    1,943    2,026 

Stock Options

All stock options have an exercise price that is equal to the closing fair market value of the Company’s stock on the date the options were granted. Options granted under the plans generally vest over a four-year period and expire 10 years from the grant date. The Company did not grant any stock options during the years ended December 31, 2024, 2023, or 2022.

At December 31, 2024, there was $32,000 of total unrecognized compensation cost related to nonvested stock option grants.  The cost is expected to be recognized over a weighted-average period of 0.3 years.  The fair value of stock option grants that vested during 2024, 2023, and 2022 was $576,000, $846,000 and $1.1 million, respectively.

A summary of the status of the stock option plan and changes for the period is presented below:

       
       For the years ended December 31,
   2024  2023  2022
   Shares   Weighted
average
exercise
price		   Weighted
Average
Remaining
Contractual
Life		  Shares   Weighted
average
exercise
price		   Weighted
Average
Remaining
Contractual
Life		  Shares   Weighted
average
exercise
price		   Weighted
Average
Remaining
Contractual
Life
Outstanding at beginning of year   331,349   $35.51       427,224   $34.32       464,724   $33.97    
Granted   -    -       -    -       -    -    
Exercised   (15,250)   17.17       (27,250)   20.18       (32,375)   27.94    
Forfeited or expired   (3,500)   41.55       (68,625)   34.15       (5,125)   43.14    
Outstanding at end of year   312,599   $36.34   4.1 years   331,349   $35.51   4.9 years   427,224   $34.32   5.7 years
Options exercisable at year-end   288,849   $36.00   4.0 years   267,376   $34.48   4.5 years   287,902   $32.35   4.8 years
Weighted average fair value of options granted during the year       $-           $-           $-    
Shares available for grant   258,622            319,058            370,824         

The aggregate intrinsic value (the difference between the Company’s closing stock price on the last trading day of the year and the exercise price, multiplied by the number of in-the-money options) of 312,599 and 331,349 stock options outstanding at December 31, 2024 and 2023 was $1.4 million and $1.3 million, respectively.  The aggregate intrinsic value of 288,849 and 267,376 stock options exercisable at December 31, 2024 and 2023 was $1.4 million and $1.3 million, respectively.

Restricted Stock Grants

Shares of restricted stock granted to employees under the stock plans are subject to restrictions as to continuous employment for a specified time period following the date of grant.  During this period, the holder is entitled to full voting rights and dividends.

At December 31, 2024, there was $3.9 million of total unrecognized compensation cost related to nonvested restricted stock grants.  The cost is expected to be recognized over a weighted-average period of 2.5 years. 

A summary of the status of the Company’s nonvested restricted stock and changes for the years ended December 31, 2024, 2023, and 2022 is as follows:

    
   December 31, 
   2024   2023   2022 
   Restricted
Shares		   Weighted
Average
Grant-Date
Fair Value		   Restricted
Shares		   Weighted
Average
Grant-Date
Fair Value		   Restricted
Shares		   Weighted
Average
Grant-Date
Fair Value		 
Nonvested at beginning of year   109,533   $44.40    80,337   $52.53    41,699   $44.71 
Granted   65,373    36.47    69,880    37.12    53,376    56.25 
Vested   (30,118)   44.72    (21,695)   48.95    (14,213)   43.26 
Forfeited   (4,937)   37.95    (18,989)   46.83    (525)   61.14 
Nonvested at end of year   139,851   $40.85    109,533   $44.40    80,337   $52.53 

Restricted Stock Units

On January 21, 2025, the Company’s Board of Directors amended the 2020 Southern First Bancshares, Inc. Equity Incentive Plan, to, among other things, allow for restricted stock units to be granted. As of December 31, 2024 and December 31, 2023, restricted stock units were unavailable under such plan.