Note 13 - Stock-based Compensation

9 Months Ended

Sep. 30, 2025

Notes to Financial Statements

Share-Based Payment Arrangement [Text Block]

Note 13 – Stock–Based Compensation

NHC recognizes stock–based compensation expense for all stock options granted over the requisite service period using the fair value at the date of grant using the Black–Scholes pricing model. Stock–based compensation totaled $1,239,000 and $1,093,000 for the three months ended September 30, 2025 and 2024, respectively. Stock-based compensation totaled $3,499,000 and $3,062,000 for the nine months ended September 30, 2025 and 2024, respectively. Stock–based compensation is included in “Salaries, wages and benefits” in the interim condensed consolidated statements of operations.

At September 30, 2025, the Company had $7,185,000 of unrecognized compensation cost related to unvested stock–based compensation awards. This unrecognized compensation cost will be amortized over an approximate two-year period.

Stock Options

The following table summarizes the significant assumptions used to value the options granted for the nine months ended September 30, 2025 and for the year ended December 31, 2024.

	September 30, 2025		December 31, 2024
Risk–free interest rate		4.13%		4.40%
Expected volatility		27.0%		24.1%
Expected life, in years		2.9		2.9
Expected dividend yield		2.80%		2.63%

The following table summarizes our outstanding stock options for the nine months ended September 30, 2025 and for the year ended December 31, 2024.

	Number of Shares			Weighted Average Exercise Price		Aggregate Intrinsic Value
Options outstanding at January 1, 2024		588,534		$	61.30	$	–
Options granted		297,783			94.42		–
Options exercised		(219,973	)		64.73		–
Options cancelled		(35,102	)		79.20		–
Options outstanding at December 31, 2024		631,242			74.73		–
Options granted		306,800			91.45		–
Options exercised		(142,364	)		65.99		–
Options cancelled		(6,333	)		78.77		–
Options outstanding at September 30, 2025		789,345		$	82.78	$	30,575,000
Options exercisable at September 30, 2025		265,750		$	73.96	$	12,636,000

Options Outstanding September 30, 2025	Exercise Prices				Weighted Average Exercise Price		Weighted Average Remaining Contractual Life in Years
236,279		$53.94	-	$71.64		$59.34		2.1
553,066		$90.62	-	$106.48		92.79		4.0
789,345						$82.78		3.4