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Stock Compensation Plans
 6 Months Ended
Jun. 30, 2024
Share-Based Payment Arrangement [Abstract]  
Stock Compensation Plans

5) 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 $183,184 and $142,696 has been recognized for these plans for the three month periods ended June 30, 2024 and 2023, respectively, and $382,182 and $284,883 has been recognized for these plans for the six month periods ended June 30, 2024 and 2023, respectively, and is included in personnel expenses on the condensed consolidated statements of earnings. As of June 30, 2024, the total unrecognized compensation expense related to the options issued was $329,670, which is expected to be recognized over the remaining vesting period.

 

The fair value of each 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.

 

Activity of the stock option plans during the six month period ended June 30, 2024, is summarized as follows:

 

   Number of
Class A Shares		   Weighted Average Exercise Price (2)   Number of
Class C Shares		   Weighted Average Exercise Price (2) 
                 
Outstanding at January 1, 2024   833,570   $4.91    1,520,062   $5.57 
Adjustment for the effect of stock dividends   38,724         76,005      
Granted   16,500         -      
Exercised   (45,671)        -      
Cancelled   (16,538)        -      
Outstanding at June 30, 2024   826,585   $5.09    1,596,067   $5.57 
                     
As of June 30, 2024:                    
Options exercisable   768,960   $4.89    1,443,567   $5.35 
                     
As of June 30, 2024:                    
Available options for future grant   38,564         556,238      
                     
Weighted average contractual term of options outstanding at June 30, 2024   5.05 years         6.00 years      
                     
Weighted average contractual term of options exercisable at June 30, 2024   4.72 years         5.75 years      
                    
Aggregated intrinsic value of options outstanding at June 30, 2024 (1)  $2,083,992        $3,255,564      
                    
Aggregated intrinsic value of options exercisable at June 30, 2024 (1)  $2,089,110        $3,264,864      

 

 

(1)The Company used a stock price of $7.61 as of June 30, 2024 to derive intrinsic value.
(2)Adjusted for the effect of annual stock dividends.

 

 

SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

June 30, 2024 (Unaudited)

 

5) Stock Compensation Plans (Continued)

 

Activity of the stock option plans during the six month period ended June 30, 2023, is summarized as follows:

 

   Number of
Class A Shares		   Weighted Average Exercise Price (2)   Number of
Class C Shares		   Weighted Average Exercise Price 
                 
Outstanding at January 1, 2023   976,605   $4.56    1,157,203   $5.31 
Adjustment for the effect of stock dividends   38,266         57,859      
Granted   16,000         -      
Exercised   (214,989)        -      
Cancelled   -         -      
Outstanding at June 30, 2023   815,882   $4.75    1,215,062   $5.31 
                     
As of June 30, 2023:                    
Options exercisable   764,632   $4.64    1,067,562   $5.18 
                     
As of June 30, 2023:                    
Available options for future grant   171,386         834,750      
                     
Weighted average contractual term of options outstanding at June 30, 2023   4.87 years         6.41 years      
                     
Weighted average contractual term of options exercisable at June 30, 2023   4.56 years         6.14 years      
                    
Aggregated intrinsic value of options outstanding at June 30, 2023 (1)  $3,018,675        $3,815,225      
                    
Aggregated intrinsic value of options exercisable at June 30, 2023 (1)  $2,910,455        $3,487,200      

 

 

(1)The Company used a stock price of $8.45 as of June 30, 2023 to derive intrinsic value.
(2)Adjusted for the effect of annual stock dividends.

 

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 the six month periods ended June 30, 2024 and 2023 was $142,210 and $387,561, respectively.

 

 

 

SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

June 30, 2024 (Unaudited)

 

5) Stock Compensation Plans (Continued)

 

Restricted Stock Units (“RSUs”)

 

Stock based compensation expense for RSUs issued of $882 and nil has been recognized under these plans for the three month periods ended June 30, 2024 and 2023, respectively, and of $1,771 and $742 has been recognized under these plans for the six month periods ended June 30, 2024 and 2023, respectively, and is included in personnel expenses on the condensed consolidated statements of earnings. The fair value of each RSU granted is determined by the Company’s stock price on the date of the grant. As of June 30, 2024, the total unrecognized compensation expense related to the RSUs issued was $1,493, which is expected to be recognized over the remaining vesting period.

 

Activity of the RSUs during the six month period ended June 30, 2024 is summarized as follows:

 

   Number of
Class A Shares		   Weighted Average Grant Date Fair Value 
Non-vested at January 1, 2024   2,245   $7.72 
Granted   -      
Vested   (865)     
Non-vested at June 30, 2024   1,380   $7.99 
           
Available RSUs for future grant   16,540      

 

Activity of the RSUs during the six month period ended June 30, 2023 is summarized as follows:

 

   Number of
Class A Shares		   Weighted Average Grant Date Fair Value 
Non-vested at January 1, 2023   1,620   $6.48 
Granted   -      
Vested   (405)     
Non-vested at March 31, 2023   1,215   $6.48 
           
Available RSUs for future grant   18,380      

 

 

SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

June 30, 2024 (Unaudited)