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Note 10 - Stock-based Compensation
 3 Months Ended
Mar. 31, 2026
Notes to Financial Statements  
Share-Based Payment Arrangement [Text Block]

Note 10 - Stock-based Compensation

 

In May 2020, the Company's shareholders approved the First Northwest Bancorp 2020 Equity Incentive Plan ("2020 EIP"), which provides for the grant of incentive stock options, non-qualified stock options, stock appreciation rights, restricted stock shares or restricted stock units, and performance share awards to eligible participants through May 2030. The cost of awards under the 2020 EIP generally is based on the fair value of the awards on their grant date. The maximum number of shares that may be utilized for awards under the 2020 EIP is 520,000. As of March 31, 2026, there were 62,552 total shares available for grant under the 2020 EIP, all of which are available to be granted as restricted shares, performance shares, options or stock appreciation rights.

 

There were 33,101 and 64,443 shares of restricted stock awarded, respectively, during the three months ended March 31, 2026 and 2025. Restricted share awards vest ratably over periods ranging from one to five years from the date of grant provided the eligible participant remains in service to the Company. The Company recognizes compensation expense for the restricted stock awards based on the fair value of the shares at the grant date amortized over the vesting period. 

 

In addition, there were 16,045 and 33,251 performance shares awarded, respectively, during the three months ended March 31, 2026 and 2025. Performance share awards vest in accordance with the terms outlined in each award agreement. The Company recognizes compensation expense for the performance share awards based on the fair value of the shares at the grant date amortized over the performance period.

 

 

For the three months ended March 31, 2026 and 2025, total compensation expense for the equity incentive plans was $106,000 and $194,000, respectively. Included in the compensation expense for the three months ended March 31, 2026 and 2025, was directors' equity compensation of $57,000 and $56,000, respectively.

 

The following tables provide a summary of changes in non-vested stock awards for the period shown:

 

 

Three Months Ended March 31, 2026

 

Shares

  

Weighted-Average Grant Date Fair Value

 

Non-vested at January 1, 2026

  162,097  $9.53 

Granted

  49,146   9.19 

Vested

  (25,785)  11.12 

Canceled (1)

  (1,862)  11.12 

Forfeited

  (15,909)  11.90 

Non-vested at March 31, 2026

  167,687   8.95 
         

(1) A surrender of vested stock awards by a participant surrendering the number of shares valued at the current stock price at the vesting date to cover the participant's tax obligation on the vested shares. The surrendered shares are canceled and are unavailable for reissue.

 

 

As of March 31, 2026, there was $1.2 million of total unrecognized compensation cost related to non-vested shares granted as stock awards. The cost is expected to be recognized over the remaining weighted-average vesting period of approximately 2.1 years.