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Note 22 - Stock Compensation Plans
 12 Months Ended
Dec. 31, 2023
Notes to Financial Statements  
Share-Based Payment Arrangement [Text Block]

Note 22. Stock Compensation Plans

 

On May 10, 2023, the Company’s shareholders approved the First National Corporation 2023 Stock Incentive Plan, which replaced the 2014 Stock Incentive Plan and makes available up to 325,000 shares of common stock for the granting of stock options, restricted stock awards, restricted stock units, stock appreciation rights, and other stock-based awards.  Beginning on May 11, 2023, new equity awards granted by the Company are from the 2023 Stock Incentive Plan and not from the 2014 Stock Incentive Plan.   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 2023, the Company granted and issued 11,700 shares of common stock to members of the Board of Directors for their dedicated service and support. Also during 2023, the Company issued 21,302 shares of common stock to employees.  Compensation expense related to stock awards totaled $402 thousand and $481 thousand for the years ended December 31, 2023 and 2022, 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 8, 2023, 13,727 restricted stock units were granted to employees with 4,580 units vesting immediately, 4,575 units vesting after one year, and 4,572 units vesting after two 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:

 

  

2023

 
  

Shares

  Weighted Average Grant Date Fair Value 

Unvested, January 1, 2023

  29,181  $20.31 

Granted

  23,727   16.56 

Vested

  (11,401)  19.20 

Forfeited

  —   — 

Unvested, December 31, 2023

  41,507  $18.47 

 

At December 31, 2023, 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 $351 thousand. This expense is expected to be recognized through 2028. Compensation expense related to restricted stock unit awards recognized for the years ended December 31, 2023 and 2022 totaled $351 thousand and $304 thousand, respectively.