In 2013, Bancshares’ shareholders authorized the Company to provide share-based compensation awards to eligible employees, directors and consultants of the Company and its affiliates pursuant to the 2013 Incentive Plan. Available award types included stock options, stock appreciation rights, restricted stock and restricted stock units, and performance share awards. The 2013 Incentive Plan, as amended in 2019, expired in March 2023. In April 2023, Bancshares’ shareholders approved the 2023 Incentive Plan, which authorizes the Compensation Committee of the Board of Directors to grant substantially the same types of share-based awards to eligible employees, directors and consultants. Collectively, the 2013 Incentive Plan and the 2023 Incentive Plan are herein referred to as the Company’s “Incentive Plan.” In accordance with the Incentive Plan, shares of common stock available for issuance pursuant to the grants may consist, in whole or in part, of authorized and unissued shares, treasury shares or shares reacquired by the Company in any manner. Since the origination of the Incentive Plan, through December 31, 2024, only stock options and restricted stock have been granted. Stock-based compensation expense related to stock awards totaled $0.6 million and $0.5 million for the years ended December 31, 2024 and 2023, respectively.

Stock option awards have been granted with an exercise price equal to the market price of the Company’s common stock on the date of the grant and have vesting periods ranging from one to three years, with 10-year contractual terms. The Company recognizes the cost of services received in exchange for stock option awards based on the grant date fair value of the award, with compensation expense recognized on a straight-line basis over the award’s vesting period. The fair value of outstanding awards was determined using the Black-Scholes option pricing model at the date of grant. The Company did not grant any stock option awards during the years ended December 31, 2024 and 2023.

The following table summarizes the Company’s stock option activity for the periods presented.


	Year Ended
	December 31, 2024				December 31, 2023
	Number of Shares		Weighted-Average Exercise Price		Number of Shares		Weighted-Average Exercise Price
Options:
Outstanding, beginning of year		411,900	$	9.77		419,650	$	9.79
Granted		—		—		—		—
Exercised		136,050		8.19		500		8.00
Forfeited		7,600		8.09		7,250		10.82
Options outstanding, end of year		268,250	$	10.62		411,900	$	9.77
Options exercisable, end of year		268,250	$	10.62		411,900	$	9.77

The aggregate intrinsic value of stock options outstanding (calculated as the amount by which the market value of underlying stock exceeds the exercise price of the option) was $0.6 million and $0.5 million as of December 31, 2024 and 2023, respectively.

During the years ended December 31, 2024 and 2023, 55,300 shares and 57,300 shares, respectively, of restricted stock were granted. Awards granted to employees had a three-year vesting period, while awards granted to non-employee directors had a one-year vesting period. The Company recognizes the cost of services received in exchange for restricted stock awards based on the grant date closing price of the stock, with compensation expense recognized on a straight-line basis over the award’s vesting period.

The following table summarizes the Company's restricted stock award activity for the periods presented.


	Year Ended
	December 31, 2024				December 31, 2023
	Number of Shares		Weighted-Average Grant-Date Fair Value		Number of Shares		Weighted-Average Grant-Date Fair Value
Restricted stock awards:
Nonvested shares, beginning of year		86,443	$	10.03		71,348	$	10.51
Granted		55,300		10.41		57,300		9.85
Released from restriction		47,644		9.96		38,320		10.64
Forfeited		1,500		10.41		3,885		10.11
Nonvested shares, end of year		92,599	$	10.29		86,443	$	10.03