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Note 22 - Stock Compensation Plans

12 Months Ended

Dec. 31, 2021

Share-based Payment Arrangement [Text Block]

Note 22. Stock Compensation Plans

On May 13, 2014, the Company’s shareholders approved the First National Corporation 2014 Stock Incentive Plan, which makes available up to 240,000 shares of common stock for the granting of stock options, restricted stock awards, stock appreciation rights, and other stock-based awards. Awards are made at the discretion of the Board of Directors and compensation cost equal to the fair value of the award is recognized over the vesting period.

Stock Awards

Whenever the Company deems it appropriate to grant a stock award, the recipient receives a specified number of unrestricted shares of employer stock. Stock awards may be made by the Company at its discretion without cash consideration and may be granted as settlement of a performance-based compensation award.

During 2021, the Company granted and issued 6,000 shares of common stock to members of the Board of Directors for their dedicated service and support. Compensation expense related to stock awards totaled $127 thousand and $50 thousand for the years ended December 31, 2021 and 2020, respectively.

Restricted Stock Units

Restricted stock units are an award of units that correspond in number and value to a specified number of shares of employer stock which the recipient receives according to a vesting plan and distribution schedule after achieving required performance milestones or upon remaining with the employer for a particular length of time. Each restricted stock unit that vests entitles the recipient to receive one share of common stock on a specified issuance date.

On February 23, 2021, 13,094 restricted stock units were granted to employees with 2,026 units vesting immediately, 4,040 units subject to a two year vesting schedule with one half of the units vesting each year on the grant date anniversary, and 7,028 units vesting after five years. On July 1, 2021, an additional 3,000 restricted stock units were granted to employees. These units are subject to a two year vesting schedule with 1,500 of the units vesting on February 23 of each year. On October 13, 2021, an additional 7,000 restricted stock units were granted to employees. These units are subject to a five year vesting schedule with 1,000 units vesting after three years and 6,000 units vesting after five years. The recipients do not have any stockholder rights, including voting, dividend, or liquidation rights, with respect to the shares underlying awarded restricted stock units until vesting has occurred and the recipients become the record holder of those shares. The unvested restricted stock units will vest on the established schedule if the employees remain employed by the Company on future vesting dates.

A summary of the activity for the Company’s restricted stock units for the period indicated is presented in the following table:

	*2021*
	Shares			Weighted Average Grant Date Fair Value
Unvested, January 1, 2021		15,858		$	20.40
Granted		23,094			19.39
Vested		(8,073	)		19.84
Forfeited		(98	)		18.41
Unvested, December 31, 2021		30,781		$	19.79

At December 31, 2021, based on restricted stock unit awards outstanding at that time, the total unrecognized pre-tax compensation expense related to unvested restricted stock unit awards was $236 thousand. This expense is expected to be recognized through 2024. Compensation expense related to restricted stock unit awards recognized for the years ended December 31, 2021 and 2020 totaled $226 thousand and $240 thousand, respectively.