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Note 13 - Stock-based Compensation

12 Months Ended

Dec. 31, 2024

Notes to Financial Statements

Compensation and Employee Benefit Plans [Text Block]

13.

STOCK-BASED COMPENSATION

The Company maintains a stock incentive plan under which incentive and nonqualified stock options and other stock awards may be granted. On February 15, 2024, the Company’s Board of Directors adopted, and on October 31, 2024, our shareholders approved, the 2024 Equity Incentive Plan (the “2024 Plan”). Under the 2024 Plan, 1,600,000 shares are reserved for the issuance of stock awards to employees, officers, directors, consultants and advisors of the Company. The stock option exercise price and the restricted stock purchase price under the 2024 Plan shall not be less than 100% of the fair market value of the Company’s common stock on the date the award is granted. The fair market value is determined by the closing price of the Company’s common stock, on its primary exchange, on the same date that the option or award is granted.
As of December 31, 2024, the company did not grant any shares of its common stock under the 2024 Plan.

Prior to the 2024 Plan, the Company maintained a stock incentive plan (the “Plan”) under which incentive and nonqualified stock options and other stock awards could be granted. On March 13, 2014, the Company’s Board of Directors adopted, and on May 29, 2014, our shareholders approved, the 2014 Amended and Restated Stock Option and Incentive Plan (the “Plan”) which amended and restated the Company’s 2006 Stock Option Plan. Under the Plan, 3,000,000 shares (as adjusted for the Company’s 2-for-1 forward split of its common stock paid in August 2021 and the Company’s 2-for-1 forward split of its common stock paid in March 2022) were reserved for the issuance of stock awards to directors, officers, key employees, and others. The stock option exercise price and the restricted stock purchase price under the 2014 Plan was not to be less than 85% of the fair market value of the Company’s common stock on the date the award is granted. The fair market value was determined by the closing price of the Company’s common stock, on its primary exchange, on the same date that the option or award was granted. This Plan expired on March 13, 2024, and no further grants may be made under the Plan. All outstanding unvested awards granted under the Plan, however, remain subject to the terms and conditions of the Plan.

During May 2024, the Company issued 2,130 shares of common stock to non-employee directors. These shares had a grant date fair value of $17.60 per share, based on the closing price of the Company’s stock on the date of issuance. These shares are not registered under the Securities Act of 1933 and are subject restrictions on transfer under the requirements of such act and the rules and regulations thereunder.

During February 2023, the Company granted 28,313 shares of common stock to certain key employees. These stock awards had grant date fair values of $28.30 per share, based on the closing price of the Company’s stock on the date of grant, and vest in 25% increments over four years, beginning one year from the anniversary date of the grant.

During May 2023, the Company granted 2,295 shares of common stock to non-employee directors. These stock awards had a grant date fair value of $23.95 per share, based on the closing price of the Company’s stock on the date of grant, and vested immediately.

During February 2022, the Company granted 29,120 shares of common stock to certain key employees. These stock awards had grant date fair values of $38.80 per share, based on the closing price of the Company’s stock on the date of grant, and vest in 25% increments over four years, beginning one year from the anniversary date of the grant.

During May 2022, the Company granted 1,855 shares of common stock to non-employee directors. These stock awards had a grant date fair value of $29.60 per share, based on the closing price of the Company’s stock on the date of grant, and vested immediately.

During June 2022, the Company granted 3,500 shares of common stock to a key employee. This stock award had a grant date fair value of $27.68 per share, based on the closing price of the Company’s stock on the date of grant, and vests in 25% increments over four years, beginning one year from the anniversary date of the grant.

During 2024, 2023 and 2022, there were no grants of stock options and there were no outstanding stock options at December 31, 2024 or December 31, 2023. At December 31, 2024, approximately 1,600,000 shares were available for granting future options or restricted stock under the recently approved 2024 Equity Incentive Plan.

The grant date fair value of stock and stock options vested during 2024, 2023 and 2022 was approximately $928,000, $576,000 and $392,000, respectively. Total pre-tax stock-based compensation expense, recognized in salaries, wages and benefits was approximately $723,000 during 2024 and includes approximately $37,000 recognized as a result of the grant of a total of 2,130 shares of stock to four non-employee directors during the second quarter of 2024. The Company recognized a total income tax benefit of approximately $170,000 related to stock-based compensation expense during 2024. The recognition of stock-based compensation expense decreased diluted earnings per common share by $0.02 and basic earnings per common share by approximately $0.02 during 2024. As of December 31, 2024, the Company had stock-based compensation plans with total unvested stock-based compensation expense of approximately $1,315,000 which is being amortized over the remaining vesting period. As a result, the Company expects to recognize the following approximate amounts of additional compensation expense related to unvested restricted stock awards during each of the years indicated:

2025		$	717,000
2026		$	465,000
2027		$	133,000
2028			-
2029			-

Total pre-tax stock-based compensation expense, recognized in salaries, wages and benefits was approximately $553,000 during 2023 and includes approximately $55,000 recognized as a result of the grant of a total of 2,295 shares of stock to four non-employee directors during the second quarter of 2023. The Company recognized a total income tax benefit of approximately $197,000 related to stock-based compensation expense during 2023. The recognition of stock-based compensation expense decreased diluted earnings per common share by $0.02 and basic earnings per common share by approximately $0.02 during 2023.

Total pre-tax stock-based compensation expense, recognized in salaries, wages and benefits was approximately $715,000 during 2022 and includes approximately $55,000 recognized as a result of the grant of 1,855 shares of stock to four non-employee directors during the second quarter of 2022. The Company recognized a total income tax benefit of approximately $170,000 related to stock-based compensation expense during 2022. The recognition of stock-based compensation expense decreased diluted earnings per common share by $0.03 and basic earnings per common share by approximately $0.02 during 2022.

There were no options granted during 2024, 2023, or 2022.

A summary of the status of the Company’s non-vested restricted stock as of December 31, 2024 and changes during the year ended December 31, 2024, is presented below:

		Restricted Stock
		Number of Shares				Weighted- Average Grant Date Fair Value
Nonvested—January 1, 2024			198,859			$	14.07
Granted			2,130				17.60
Canceled/forfeited/expired			(4,383	)			30.65
Vested			(68,015	)			13.64
Nonvested—December 31, 2024:			128,591			$	13.79