Stock Compensation Plans

9 Months Ended

Sep. 30, 2024

Stock Compensation Plans

Stock Compensation Plans

Note 13 — Stock Compensation Plans

At a special shareholders meeting held on September 29, 2022, the Company’s shareholders approved the Company’s 2022 Equity Incentive Plan whereby 1,369,771 shares of the Company’s common stock were reserved from authorized but unissued shares for purposes of grants of incentive stock options, nonqualified stock options, restricted stock, restricted stock units, performance shares and performance units to selected employees and non-employee directors of the Company.

The product of the number of shares granted and the grant date market price of the Company’s common stock determine the fair value of restricted stock under the Company’s 2022 Equity Incentive plan. Management recognizes compensation expense for the fair value of restricted stock on a straight-line basis over the requisite service period for the entire award. As of September 30, 2024 and December 31, 2023, there were 132,759 shares available for future awards under this plan, which includes 98,311 shares available for stock options and 34,448 shares available for restricted stock awards.

A summary of the Company’s restricted stock activity and related information for the three and nine months ended September 30, 2024 and 2023 follows:

	2024
			Weighted
			Average
	Shares		Market Price
Outstanding at December 31, 2023		286,508	$	13.72
Granted		—		—
Forfeited		—		—
Vested		—		—
Outstanding at March 31, 2024		286,508	$	13.72
Granted		—		—
Forfeited		—		—
Vested		—		—
Outstanding at June 30, 2024		286,508	$	13.72
Granted		30,000		22.82
Forfeited		—		—
Vested		17,376		—
Outstanding at September 30, 2024		299,132	$	14.63
	2023
			Weighted
			Average
	Shares		Market Price
Outstanding at December 31, 2022		352,037	$	13.67
Granted		—		—
Forfeited		—		—
Vested		—		—
Outstanding at March 31, 2023		352,037	$	13.67
Granted		—		—
Forfeited		—		—
Vested		—		—
Outstanding at June 30, 2023		352,037	$	13.72
Granted		—		—
Forfeited		—		—
Vested		17,376		—
Outstanding at September 30, 2023		334,661	$	13.67

Compensation expense related to restricted stock was $290,000 and $241,000 for the three months, and $794,000 and $723,000 for the nine months ended September 30, 2024 and 2023. At September 30, 2024 and December 31, 2023, the total compensation cost related to non-vested awards that has not yet been recognized was $3.7 million and $3.8 million, respectively, which is expected to be recognized over the next three years.

A summary of the Company’s stock option activity and related information for the three and nine months ended September 30, 2024 and 2023 follows:

	2024
			Weighted
			Average
	Options		Exercise Price
Outstanding at December 31, 2023		880,097	$	13.67
Granted		—		—
Forfeited		—		—
Exercised		1,000		14.08
Outstanding at March 31, 2024		879,097	$	13.67
Exercisable at March 31, 2024		175,019		13.67
Granted		—		—
Forfeited		—		—
Exercised		—		—
Outstanding at June 30, 2024		879,097	$	13.67
Exercisable at June 30, 2024		175,019		13.67
Granted		—		—
Forfeited		—		—
Exercised		—		—
Outstanding at September 30, 2024		879,097	$	13.67
Exercisable at September 30, 2024		218,460		13.67
	2023
			Weighted
			Average
		Options	Exercise Price
Outstanding at December 31, 2022		880,097	$	13.67
Granted		—		—
Forfeited		—		—
Exercised		—		—
Outstanding at March 31, 2023		880,097	$	13.67
Exercisable at March 31, 2023		—		—
Granted		—		—
Forfeited		—		—
Exercised		—		—
Outstanding at June 30, 2023		880,097	$	13.67
Exercisable at June 30, 2023		—		—
Granted		—		—
Forfeited		—		—
Vested		—		—
Outstanding at September 30, 2023		880,097	$	13.67
Exercisable at September 30, 2023		43,441		13.67

Compensation cost related to stock options is recognized based on the fair value of the stock options at the grant date on a straight line basis over the vesting period. Compensation expense related to stock options was $192,000 and $192,000 for the three months, and $576,000 and $576,000 for the nine months ended September 30, 2024 and 2023. At September 30, 2024 and December 31, 2023, unrecognized compensation cost related to stock option awards was $2.4 million and $3.0 million, respectively, which is expected to be recognized over the next three years.