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Stock Compensation Plans
 12 Months Ended
Dec. 31, 2023
Share-Based Payment Arrangement [Abstract]  
Stock Compensation Plans

13) Stock Compensation Plans

 

The Company has equity incentive plans (the “2013 Plan”, the “2014 Director Plan” and the “2022 Plan”).

 

Stock Options

 

Stock based compensation expense for stock options issued of $601,058 and $929,321 has been recognized under these plans for 2023 and 2022, respectively, and is included in personnel expenses on the consolidated statements of earnings. As of December 31, 2023, the total unrecognized compensation expense related to the stock options issued was $677,948, which is expected to be recognized over the remaining vesting period.

 

The fair value of each stock option granted is estimated on the date of grant using the Black Scholes Option Pricing Model. The Company estimates the expected life of the options using the simplified method. Future volatility is estimated based upon the weighted historical volatility of the Company’s Class A common stock over a period equal to the expected life of the options. The risk-free interest rate for the expected life of the options is based upon the Federal Reserve Board’s daily interest rates in effect at the time of the grant.

 

The following table summarizes the assumptions used in estimating the fair value of each stock option granted along with the weighted-average fair value of the stock options granted.

 

          Assumptions 
Grant Date  Plan  Weighted-Average Fair Value of Each Option   Expected Dividend Yield (1)   Underlying stock FMV   Weighted-Average Volatility   Weighted-Average Risk-Free Interest Rate   Weighted-Average Expected Life (years) 
December 1, 2023  All Plans  $1.88    5%  $7.99    36.76%   4.14%   4.9 
                                  
January 30, 2023  All Plans  $1.65    5%  $7.10    36.73%   3.64%   5.31 
                                  
January 18, 2023  All Plans  $1.70    5%  $7.37    36.79%   3.40%   5.31 
                                  
December 2, 2022  All Plans  $1.48    5%  $6.48    37.03%   3.69%   4.88 

 

 

(1)Stock dividend

 

 

SECURITY NATIONAL FINANCIAL CORPORATION

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Years Ended December 31, 2023 and 2022

 

13) Stock Compensation Plans (Continued)

 

Activity of the stock option plans is summarized as follows:

 

   Number of
Class A Shares		   Weighted Average Exercise Price   Number of
Class C Shares		   Weighted Average Exercise Price 
Outstanding at January 1, 2022   1,024,351   $4.38    821,146   $5.26 
Adjustment for the effect of stock dividends   47,780         41,057      
Granted   82,500         295,000      
Exercised   (176,435)        -      
Cancelled   (1,591)        -      
                     
Outstanding at December 31, 2022   976,605   $4.56    1,157,203   $5.31 
Adjustment for the effect of stock dividends   38,266         57,859      
Granted   106,500         305,000      
Exercised   (286,965)        -      
Cancelled   (836)        -      
                     
Outstanding at December 31, 2023   833,570   $5.22    1,520,062   $5.86 
                     
Exercisable at end of year   739,070   $4.87    1,215,062   $5.31 
                     
Available options for future grant   92,820         529,750      
                     
Weighted average contractual term of options outstanding at December 31, 2023   5.25 years         6.50 years      
                     
Weighted average contractual term of options exercisable at December 31, 2023   4.66 years         5.90 years      
                     
Aggregated intrinsic value of options outstanding at December 31, 2023 (1)  $3,149,704        $4,765,559      
                     
Aggregated intrinsic value of options exercisable at December 31, 2023 (1)  $3,049,987        $4,483,509      

 

 

(1)The Company used a stock price of $9.00 as of December 31, 2023 to derive intrinsic value.

 

The total intrinsic value (which is the amount by which the fair value of the underlying stock exceeds the exercise price of an option on the exercise date) of stock options exercised during 2023 and 2022 was $657,354 and $619,064, respectively.

 

 

SECURITY NATIONAL FINANCIAL CORPORATION

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Years Ended December 31, 2023 and 2022

 

13) Stock Compensation Plans (Continued)

 

Restricted Stock Units (“RSUs”)

 

Stock based compensation expense for RSUs issued of $304 and $371 has been recognized under these plans for the 2023 and 2022, respectively, and is included in personnel expenses on the consolidated statements of earnings. As of December 31, 2023, the total unrecognized compensation expense related to the RSUs issued was $3,263, which is expected to be recognized over the remaining vesting period.

 

Activity of the RSUs is summarized as follows:

  

   Number of
Class A Shares		   Weighted Average Grant Date Fair Value 
Non-vested at December 31, 2022   1,620   $6.48 
Granted   1,840      
Vested   (1,215)     
           
Non-vested at December 31, 2023   2,245   $7.72 
           
Available RSUs for future grant   16,540      

 

 

SECURITY NATIONAL FINANCIAL CORPORATION

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Years Ended December 31, 2023 and 2022