XML 48 R32.htm IDEA: XBRL DOCUMENT v3.25.1
Stock-Based Compensation
 12 Months Ended
Dec. 31, 2024
Share-Based Payment Arrangement [Abstract]  
Stock-Based Compensation

(19) Stock-Based Compensation

 

Overview. The Company has a stock-based employee compensation plan, which allows for the issuance of stock options, stock appreciation rights, and stock awards (including, among others, restricted common stock, and restricted stock unit awards.), the purpose of which is to provide additional incentive to certain employees, directors, and service providers by facilitating their purchase of a stock interest in the Company. Compensation expense related to prior awards under the Company’s current and former stock-based employee compensation plans is recognized on a straight line basis over the vesting period, which is typically four years. The stock-based compensation cost related to these awards was $520,000, $352,000, and $295,000 for the years ended December 31, 2024, 2023, and 2022, respectively. The Company recognized tax benefits of $126,000, $84,000, and $77,000 for the years ended December 31, 2024, 2023, and 2022, respectively.

 

 

For stock options, the exercise price may not be less than 100% of the fair market value of the shares on the date of the grant, and no option shall be exercisable after ten years from the grant date. In determining compensation cost, the Black-Scholes option-pricing model is used to estimate the fair value of options on date of grant. The Black-Scholes model is a closed-end model that considers expected volatility, the expected term of the options the risk-free rate for the expected option term, and dividend yield using the assumptions outlined below. Expected volatility is based on historical volatility of the Company’s stock. The Company uses historical exercise behavior and other qualitative factors to estimate the expected term of the options, which represents the period of time that the options granted are expected to be outstanding. The risk-free rate for the expected term is based on U.S. Treasury rates in effect at the time of grant.

 

2015 Stock Incentive Plan. On May 20, 2015, our stockholders approved the Landmark Bancorp, Inc., 2015 Stock Incentive Plan (the “2015 Stock Incentive Plan”), which authorized the issuance of equity awards covering 407,224 shares of common stock, as adjusted for subsequent stock dividends. On August 1, 2022, the Compensation Committee awarded 20,318 shares of restricted common stock pursuant to the 2015 Stock Incentive Plan, as adjusted for subsequent stock dividends. The restricted stock awards vest ratably over one or four years and the value was based on a stock price of $22.02 per share on the date such shares were granted, as adjusted for subsequent stock dividends. On August 1, 2023, the Compensation Committee awarded 5,725 shares of restricted common stock pursuant to the 2015 Stock Incentive Plan, as adjusted for subsequent stock dividends and options to acquire 89,425 shares of common stock, as adjusted for subsequent stock dividends. The restricted stock awards vest ratably over one year and the value was based on a stock price of $19.20 per share on the date such shares were granted, as adjusted for subsequent stock dividends. The options vest ratably over four years.

 

On February 29, 2024, the Compensation Committee awarded, effective March 29, 2024, 5,250 shares of restricted common stock pursuant to the 2015 Stock Incentive Plan, as adjusted for subsequent stock dividends and options to acquire 42,000 shares of common stock, as adjusted for subsequent stock dividends. The restricted stock awards vest ratably over four years and the value was based on a stock price of $18.36 per share on the date such shares were granted, as adjusted for subsequent stock dividends. The options vest ratably over four years.

 

2024 Stock Incentive Plan. On May 22, 2024, our stockholders approved the Landmark Bancorp, Inc., 2024 Stock Incentive Plan which authorized the issuance of equity awards covering 525,000 shares of common stock as adjusted for subsequent stock dividends. Upon shareholder approval of the 2024 Stock Incentive Plan, the 2015 Stock Incentive Plan was frozen with respect to future grants.

 

On August 1, 2024, the Compensation Committee awarded 37,984 shares of restricted common stock, as adjusted for subsequent stock dividends. The restricted stock awards vest ratably over one or four years and the value was based on a stock price of $19.10 per share on the date such shares were granted, as adjusted for subsequent stock dividends. As of December 31, 2024, there were 487,016 shares of common stock remaining available for issuance under the 2024 Stock Incentive Plan.

 

The fair value of the options granted were determined using the following weighted-average assumptions as of the grant date:

 

   Years ended December 31, 
   2024   2023 
Risk-free interest rate   4.20%   4.15%
Expected term   7 years    7 years 
Expected stock price volatility   27.18%   26.31%
Dividend yield   4.36%   3.97%

 

 

A summary of option activity during 2024 is presented below:

 

(Dollars in thousands, except per share amounts)  Weighted   Weighted     
       average   average     
       exercise   remaining   Aggregate 
       price   contractual   intrinsic 
   Shares   per share   term   value 
Outstanding at January 1, 2024   228,408   $20.58     7.2 years    $88 
Granted   40,000   $18.50           
Effect of 5% stock dividend   12,792                
Forfeited/expired   (12,474)  $20.95           
Exercised   -   $-           
Outstanding at December 31, 2024   268,726   $19.44     6.7 years    $1,235 
Exercisable at December 31, 2024   156,919   $19.26     5.4 years    $720 
Fully vested options at December 31, 2024   156,919   $19.26     5.4 years    $720 

 

Additional information about stock options exercised is presented below:

 

   2024   2023   2022 
(Dollars in thousands)  Years ended December 31, 
   2024   2023   2022 
Intrinsic value of options exercised (on exercise date)  $-   $4   $3 
Cash received from options exercised   -    52    - 
Excess tax benefit realized from options exercised  $-   $1   $- 

 

 

As of December 31, 2024, there was $329,000 of total unrecognized compensation cost related to the 111,807 outstanding unvested options that will be recognized over the following periods:

 

(Dollars in thousands)    
Year  Amount 
2025   132 
2026   108 
2027   79 
2028   10 
Total  $329 

 

The fair value of restricted stock on the vesting date was $293,000, $187,000, and $223,000 during the years ended December 31, 2024, 2023, and 2022 respectively. A summary of nonvested restricted common stock activity during 2024 is presented below:

 

   Shares   Weighted average grant date price per share 
Nonvested restricted common stock at January 1, 2024   23,001   $22.40 
Granted   41,175   $19.96 
Vested   (14,868)  $20.06 
Forfeited   (1,183)  $22.16 
Effect of 5% stock dividend   2,384      
Nonvested restricted common stock at December 31, 2024   50,509   $19.77 

 

 

As of December 31, 2024, there was $791,000 of total unrecognized compensation cost related to the outstanding nonvested restricted shares that will be recognized over the following periods:

 

(Dollars in thousands)    
Year  Amount 
2025   300 
2026   217 
2027   178 
2028   96 
Total  $791