EQUITY AWARDS

9 Months Ended

Sep. 30, 2023

Share-Based Payment Arrangement [Abstract]

NOTE 6 – EQUITY AWARDS

The Company’s 2015 Equity Incentive Plan (the “Plan”) was adopted by the Company and approved by its shareholders in April 2015. The maximum number of shares of common stock that may be issued pursuant to stock-based awards under the Plan equals 1,100,000 shares, all of which may be subject to incentive stock option treatment. Option awards are generally granted with an exercise price equal to the market price of the Company’s common stock at the date of grant; those option awards have vesting periods ranging from 5 to 10 years and have 10-year contractual terms. Restricted stock awards vest under the period of restriction specified within their respective award agreements as determined by the Company. Forfeitures are recognized as they occur, subject to a 90-day grace period for vested options.

The fair value of each option award is estimated on the date of grant using a closed form option valuation (Black-Scholes) model that uses the assumptions noted in the table below. Expected volatilities are based on historical volatilities of the Company’s common stock and similar peer group averages. The Company uses historical data to estimate option exercise and post-vesting termination behavior. The expected term of options granted is based on historical data and represents the period of time that options granted are expected to be outstanding, which takes in to account that the options are not transferable. The dividend yield is the total dividends per share paid during the period divided by the average of the

Company's stock price on each date a grant was issued. The risk-free interest rate for the expected term of the option is based on U.S. Treasury yield curve in effect at the time of the grant.

A summary of stock option activity in the Plan during the nine months ended September 30, 2023 and 2022 follows:


Nine Months Ended September 30, 2023	Number of Shares			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Life in Years		Aggregate Intrinsic Value
Outstanding at beginning of year		497,820		$	28.07		5.87	$	3,402
Granted		41,500			28.44
Exercised		(21,440	)		24.05
Forfeited		(48,450	)		30.62
Balance, September 30, 2023		469,430		$	28.02		5.53	$	1,228

Exercisable at end of period		268,030		$	25.87		3.96	$	956


Nine Months Ended September 30, 2022	Number of Shares			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Life in Years		Aggregate Intrinsic Value
Outstanding at beginning of year		502,780		$	25.77		5.59	$	5,936
Granted		69,000			35.71
Exercised		(43,280	)		22.56
Forfeited		(29,920	)		27.21
Balance, September 30, 2022		498,580		$	27.34		5.62	$	3,725

Exercisable at end of period		283,910		$	24.96		4.20	$	2,733

A summary of nonvested stock option activity in the Plan during the nine months ended September 30, 2023 and 2022 follows:


Nine Months Ended September 30, 2023	Number of Shares			Weighted-Average Grant Date Fair Value
Outstanding at beginning of year		216,480		$	5.95
Granted		41,500			5.82
Vested		(35,860	)		5.82
Forfeited		(20,720	)		12.41
Balance, September 30, 2023		201,400		$	5.95


Nine Months Ended September 30, 2022	Number of Shares			Weighted-Average Grant Date Fair Value
Outstanding at beginning of year		207,084		$	5.23
Granted		69,000			6.56
Vested		(46,014	)		5.90
Forfeited		(15,400	)		9.09
Balance, September 30, 2022		214,670		$	5.53

Information related to stock options in the Plan is as follows for the nine months ended:


	September 30, 2023		September 30, 2022
Intrinsic value of options exercised	$	99	$	521
Cash received from options exercised		516		976
Weighted average fair value of options granted		5.82		6.56

Restricted Stock Awards

A summary of restricted stock activity in the Plan during the nine months ended September 30, 2023 and 2022 follows:


Nine Months Ended September 30, 2023	Number of Shares			Weighted-Average Grant Date Fair Value
Outstanding at beginning of year		18,930		$	27.51
Granted		2,056			34.10
Vested		(3,670	)		28.57
Forfeited		(1,076	)		28.93
Balance, September 30, 2023		16,240		$	28.02


Nine Months Ended September 30, 2022	Number of Shares			Weighted-Average Grant Date Fair Value
Outstanding at beginning of year		30,190		$	27.52
Vested		(4,770	)		28.32
Balance, September 30, 2022		25,420		$	27.37

Restricted stock granted to employees typically vests over five years, but vesting periods may vary. Compensation expense for these grants will be recognized over the vesting period of the awards based on the fair value of the stock at the issue date.

As of September 30, 2023, there was $1,372 of total unrecognized compensation expense related to nonvested stock options granted under the Plan. The expense is expected to be recognized over a weighted-average period of 3.06 years.

The Company granted options under the Plan during the first nine months of 2023 and 2022. Expense of $445 and $485 was recorded during the nine months ended September 30, 2023 and 2022, respectively, which represents the fair value of shares, restricted stock and stock options vested during those periods.