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Stock Compensation Plans
 9 Months Ended
Sep. 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 $195,431 and $145,973 has been recognized for these plans for the three month periods ended September 30, 2024 and 2023, respectively, and $577,613 and $430,856 has been recognized for these plans for the nine month periods ended September 30, 2024 and 2023, respectively, and is included in personnel expenses on the condensed consolidated statements of earnings. As of September 30, 2024, the total unrecognized compensation expense related to the options issued was $134,239, 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 nine month period ended September 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   (88,714)        -      
Cancelled   (17,333)        -      
Outstanding at September 30, 2024   782,747   $5.16    1,596,067   $5.57 
                     
As of September 30, 2024:                    
Options exercisable   751,872   $5.05    1,519,817   $5.46 
                     
As of September 30, 2024:                    
Available options for future grant   39,006         556,238      
                     
Weighted average contractual term of options outstanding at September 30, 2024   4.91 years         5.74 years      
                     
Weighted average contractual term of options exercisable at September 30, 2024   4.73 years         5.63 years      
                     
Aggregated intrinsic value of options outstanding at September 30, 2024 (1)  $3,165,305        $5,793,310      
                     
Aggregated intrinsic value of options exercisable at September 30, 2024 (1)  $3,119,776        $5,676,723      

 

 

 

(1) The Company used a stock price of $9.20 as of September 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

September 30, 2024 (Unaudited)

 

5) Stock Compensation Plans (Continued)

 

Activity of the stock option plans during the nine month period ended September 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   (233,180)        -      
Cancelled   -         -      
Outstanding at September 30, 2023   797,691   $4.78    1,215,062   $5.31 
                     
As of September 30, 2023:                    
Options exercisable   770,066   $4.73    1,141,312   $5.25 
                     
As of September 30, 2023:                    
Available options for future grant   171,386         834,750      
                     
Weighted average contractual term of options outstanding at September 30, 2023   4.69 years         6.15 years      
                     
Weighted average contractual term of options exercisable at September 30, 2023   4.53 years         6.03 years      
                     
Aggregated intrinsic value of options outstanding at September 30, 2023 (1)  $2,438,675        $3,074,037      
                     
Aggregated intrinsic value of options exercisable at September 30, 2023 (1)  $2,398,360        $2,955,012      

 

 

(1) The Company used a stock price of $7.84 as of September 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 nine month periods ended September 30, 2024 and 2023 was $290,159 and $454,923, respectively.

 

 

SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

September 30, 2024 (Unaudited)

 

5) Stock Compensation Plans (Continued)

 

Restricted Stock Units (“RSUs”)

 

Stock based compensation expense for RSUs issued of $895 and nil has been recognized under these plans for the three month periods ended September 30, 2024 and 2023, respectively, and of $2,666 and $742 has been recognized under these plans for the nine month periods ended September 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 September 30, 2024, the total unrecognized compensation expense related to the RSUs issued was $598, which is expected to be recognized over the remaining vesting period.

 

Activity of the RSUs during the nine month period ended September 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   (1,325)     
Non-vested at September 30, 2024   920   $7.99 
           
Available RSUs for future grant   16,540      

 

Activity of the RSUs during the nine month period ended September 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   (810)     
Non-vested at September 30, 2023   810   $6.48 
           
Available RSUs for future grant   18,380      

 

 

SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

September 30, 2024 (Unaudited)