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Note 7 - Stock-based Compensation

9 Months Ended

Sep. 30, 2025

Notes to Financial Statements

Share-Based Payment Arrangement [Text Block]

7. STOCK-BASED COMPENSATION

In May 2022, the Company’s shareholders approved the 2022 Equity Incentive Plan (the “2022 Plan”), which provides for the grant of up to 576,550 shares of common stock, including 126,550 shares that remained available for grant under the 2013 Stock Option Plan when the 2022 Plan was adopted. The 2022 Plan provides for the grant of incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock, restricted stock units and other stock-based awards. The frequency, amount and terms of stock-based awards may be determined by the Board of Directors or its compensation committee, consistent with the terms and purposes of the 2022 plan.

In May 2013, the Company established the 2013 Stock Option Plan (the "2013 Plan") for which 90,792 shares of common stock are reserved. With the establishment of the Company’s 2022 Equity Incentive Plan no further options may be issued under the 2013 Plan, though options previously granted continue to be outstanding and governed by the 2013 Stock Option Plan.

Options granted during the nine months ended September 30, 2025 consisted of 30,803 options which were assumed on the acquisition of Cornerstone (see Note 12). 107,200 options were granted under the 2022 Plan during the nine months ended September 30, 2024. The fair value of each option granted in 2025 and 2024 was estimated on the date of grant using the following assumptions.

		2025				2024
Expected life of stock options (in years)			4.7				6.2
Risk free interest rate			4.50	%			3.98	%
Annualized Volatility			34.8	%			32.3	%
Dividend yields			2.70	%			3.17	%
Weighted-average fair value of options granted during the nine months ended September 30, 2025 and 2024		$	17.90			$	9.25

A summary of the activity within the 2013 Plan follows:

		*Shares*				*Weighted Average Exercise Price*				*Weighted Average Remaining Contractual Term in Years*				*Intrinsic Value*
Options outstanding at January 1, 2024			165,517			$	21.52
Options exercised			(32,070	)			17.03
Options cancelled			(1,600	)			24.40
Options outstanding at December 31, 2024			131,847			$	22.58
Options cancelled			(800	)		$	24.40
Options exercised			(40,255	)			22.56
Options outstanding at September 30, 2025			90,792			$	22.57				1.4			$	1,867,655
Options exercisable at September 30, 2025			90,792			$	22.57				1.4			$	1,867,655

A summary of the activity within the 2022 Plan follows:

		*Shares*				*Weighted Average Exercise Price*				*Weighted Average Remaining Contractual Term in Years*				*Intrinsic Value*
Options outstanding at January 1, 2024			105,500			$	31.00
Options granted			107,200				34.07
Options cancelled			(1,200	)			34.07
Options exercised			(1,300	)			31.00
Options outstanding at December 31, 2024			210,200			$	32.55
Options granted			30,803				31.09
Options cancelled			(2,760	)			34.07
Options exercised			(3,600	)			31.51
Options outstanding at September 30, 2025			234,643			$	32.35				7.4			$	2,530,689
Options exercisable at September 30, 2025			113,443			$	31.57				7.0			$	1,312,289
Options expected to vest after September 30, 2025			107,662			$	33.09				7.8			$	1,082,305

As of September 30, 2025, there was $1.1 million in total unrecognized compensation cost related to non-vested stock options under the 2022 plan. That cost is expected to be recognized over a weighted average period of 2.9 years. There were no unrecognized costs remaining under the 2013 plan as of September 30, 2025.

Information related to the stock options plans during the three months ended September 30, 2025 and 2024

		2025				2024
Fair value of options vested		$	191,000			$	192,000
Intrinsic value of options exercised		$	260,000			$	25,000
Cash received from option exercises		$	353,000			$	-
Tax benefit from option exercises		$	24,000			$	5,000
Compensation cost		$	93,000			$	131,000
Tax benefit associated with compensation cost		$	5,000			$	13,000

Information related to the stock options plans during the nine months ended September 30, 2025 and 2024

		2025				2024
Fair value of options vested		$	384,000			$	199,000
Intrinsic value of options exercised		$	874,000			$	561,000
Cash received from option exercises		$	936,000			$	367,000
Tax benefit from option exercises		$	43,000			$	74,000
Compensation cost		$	256,000			$	350,000
Tax benefit associated with compensation cost		$	14,000			$	33,000

During the nine months ended September 30, 2024, the Company granted 3,033 restricted stock units with a fair value of $34.07 per share and a one-year vesting period. Compensation costs related to these units during the three months ended September 30, 2025, and September 30, 2024, were $0 and $26,000, respectively. Compensation costs related to these units during the nine months ended September 30, 2025, and September 30, 2024, were $14,000 and $63,000, respectively. As of September 30, 2025, there was no unrecognized compensation cost related to restricted stock units.