Shareholders' Equity

3 Months Ended

Mar. 31, 2024

Shareholders' Equity

Shareholders' Equity

7. Shareholders’ Equity

	Three-Month Period Ended March 31, 2024 ($000’s omitted)
							Accumulated
			Capital in				Other						Total
	Common		Excess of		Retained		Comprehensive				Treasury		Shareholders’
	Stock		Par Value		Earnings		Loss		ESOT		Stock		Equity
December 31, 2023	$	525	$	14,617	$	12,954	$	(2,389)	$	(56)	$	(1,157)	$	24,494
Retirement benefits adjustment		—		—		—		19		—		—		19
Stock based compensation		—		44		—		—		—		19		63
Net Loss		—		—		(383)		—		—		—		(383)
March 31, 2024	$	525	$	14,661	$	12,571	$	(2,370)	$	(56)	$	(1,138)	$	24,193

	Three-Month Period Ended December 31, 2023 ($000’s omitted)
							Accumulated
			Capital in				Other						Total
	Common		Excess of		Retained		Comprehensive				Treasury		Shareholders’
	Stock		Par Value		Earnings		Loss		ESOT		Stock		Equity
December 31, 2022	$	523	$	14,556	$	23,741	$	(2,337)	$	(157)	$	(1,214)	$	35,112
Retirement benefits adjustment		—		—		—		13		—		—		13
Stock based compensation		—		17		—		—		—		24		41
Net Loss		—		—		(1,547)		—		—		—		(1,547)
March 31, 2023	$	523	$	14,573	$	22,194	$	(2,324)	$	(157)	$	(1,190)	$	33,619

Earnings Per Share

Basic earnings per share is computed by dividing net earnings by the weighted average number of common shares outstanding during the period. The weighted average number of common shares outstanding does not include any potentially dilutive securities or any unvested restricted shares of common stock. These unvested restricted shares, although classified as issued and outstanding, are considered forfeitable until the restrictions lapse and will not be included in the basic EPS calculation until the shares are vested. Diluted earnings per share is computed by dividing net earnings by the weighted average number of common shares outstanding during the period plus the number of shares of common stock that would be issued assuming all contingently issuable shares having a dilutive effect on the earnings per share that were outstanding for the period. The dilutive effect of unvested restrictive stock is determined using the treasury stock method. However, if the assumed common shares are anti-dilutive, basic and diluted earnings per share are the same.

	Three-Month Periods Ended
	March 31,
	2024		2023
	($000’s omitted except per share data)
Loss from continuing operations	$	(366)	$	(980)
Loss from discontinued operation		(17)		(567)
Net loss	$	(383)	$	(1,547)
Weighted average common shares outstanding (basic)		2,490		2,460
Unvested restricted stock		29		24
Weighted average common shares outstanding (diluted)		2,519		2,484
Basic and diluted loss per share
Continuing operations	$	(0.15)	$	(0.40)
Discontinued operation		(0.01)		(0.23)
Basic and diluted earnings per share	$	(0.16)	$	(0.63)

Stock-Based Compensation

The Company’s 2022 Equity Incentive Plan (“Equity Plan”) was approved by the shareholders at the 2022 Annual Meeting of Shareholders. The Equity Plan allows for various types of awards (rights) to be granted, including incentive stock options, non-qualified stock options, stock appreciation rights, restricted awards, performance share awards, cash awards, or any other equity-based awards. The total number of awards under the Equity Plan are limited to a maximum of 200,000 authorized common shares.

The Company’s executive compensation program established by the Board of Directors determines the type of awards available to the Company’s executives. The program consists of a cash incentive plan and a long-term incentive plan (“LTIP”) that are awarded annually. The LTIP includes service-based share awards that vest annually over three years, and performance-based share awards that cliff-vest based on the achievement of a certain financial metric over a specific three-year time period.

On March 26, 2024, 7,180 service-based (restricted) share awards were granted to Company executives under the 2024-2026 LTIP Stock Award (“2024-2026 Award”). Additionally, on January 29, 2024, 1,786 service-based restricted share awards were granted in connection with the hiring of an executive officer. These shares vest after a one-year service period.

The Company’s director compensation policy provides that non-employee directors receive a portion of their annual retainer in the form of shares under the Equity Plan. These shares vest quarterly over a twelve-month service period, have voting rights, and any dividends declared and paid during the restricted period accrue and are paid upon vesting. The aggregate amount of expense to the Company, measured based on the grant date fair value, is recognized over the requisite service period. No restricted shares were issued to non-employee directors under this policy during the three-month periods ended March 31, 2024 and 2023.

A summary of the status of restricted (service-based) share awards granted under all employee plans is presented below:

		Weighted
		Average Grant
	Shares	Date Fair Value
Restricted Share Activity:
Unvested at December 31, 2023	22,448	$	11.45
Granted in 2024	8,966	$	12.90
Vested in 2024	(2,600)	$	12.01
Unvested at March 31, 2024	28,814	$	11.85

Included in the three-month periods ended March 31, 2024 and 2023 is approximately $63,000 and $41,000, respectively, of stock-based compensation expense related to the restricted share awards. The Company has approximately $341,000 of stock-based compensation expense related to unvested restricted shares to be recognized over the requisite service periods.

Restricted, performance-based share awards represent a right to receive a certain number of shares of common stock based on the achievement of corporate performance goals and continued employment during the performance period. Performance-based share awards granted to executives vest at the end of a three-year period, and are not issued until the performance period is complete and the metrics are achieved. Vested and issued shares may range from 0% to a maximum of 200% of targeted amounts depending on the achievement of performance measures at the end of a three-year period. The expected cost of the shares is based on the date of grant fair value and the Company’s assessment of the probability that the performance condition will be achieved. Any related compensation expense is recognized when the probability is likely that the performance criteria will be achieved. Forfeitures are recognized as they occur. These awards may be settled in cash or shares of common stock at the election of the Company on the date of grant. It is the Company’s intent to settle performance-based share awards with shares of common stock.

On March 26, 2024, 21,541 performance-based share awards (at target) were granted to Company executives under the 2024-2026 Award at a grant date fair value of $12.63 per share. The maximum potential stock-based compensation expense for the 2024-2026 Award and prior performance-based share awards is approximately $944,000. However, no stock-based compensation expense has been recorded for the 2024-2026 Award for three-month period ended March 31, 2024 due to the low probability of achievement.