Note 7 - Employee and Director Benefits

9 Months Ended

Sep. 30, 2023

Notes to Financial Statements

Share-Based Payment Arrangement [Text Block]

NOTE 7 - EMPLOYEE AND DIRECTOR BENEFITS

Stock Incentive Plan

The Company has a stock incentive plan as described below. The compensation cost that has been charged to earnings for the plan was approximately $929,000 and $2.7 million for the three and nine months ended September 30, 2023, respectively, and $804,000 and $2.4 million for the three and nine months ended September 30, 2022, respectively.

The Company’s 2009 Amended and Restated Stock Incentive Plan authorizes the grant of up to 5,550,000 shares and allows for the issuance of Stock Appreciation Rights, Restricted Stock, Stock Options, Non-stock Share Equivalents, Performance Shares or Performance Units. The plan allows for the grant of incentive stock options and non-qualified stock options, and option awards are granted with an exercise price equal to the fair market value of the Company’s common stock at the date of grant. The maximum term of the options granted under the plan is ten years.

There have not been any grants of stock options since October of 2019.

The following table summarizes stock option activity during the nine months ended September 30, 2023 and 2022:

						Weighted
				Weighted		Average
				Average		Remaining		Aggregate
				Exercise		Contractual		Intrinsic
	Shares			Price		Term (years)		Value
								(In Thousands)
Nine Months Ended September 30, 2023:
Outstanding at January 1, 2023		280,000		$	19.43		3.0	$	14,088
Exercised		(87,700	)		12.04		0.8		3,520
Forfeited		(1,000	)		34.09		5.3		18
Outstanding at September 30, 2023		191,300		$	22.65		3.4	$	6,235
Exercisable at September 30, 2023		139,300		$	17.12		1.7	$	5,051
Nine Months Ended September 30, 2022:
Outstanding at January 1, 2022		353,250		$	19.28		3.8	$	23,525
Exercised		(65,500	)		16.42		2.3		4,164
Forfeited		(1,500	)		35.21		5.8		67
Outstanding at September 30, 2022		286,250		$	19.51		3.4	$	18,431
Exercisable at September 30, 2022		225,500		$	14.89		2.3	$	14,990

As of September 30, 2023, there was $77,000 of total unrecognized compensation cost related to non-vested stock options. The cost is expected to be recognized on the straight-line method over the next six months.

Restricted Stock and Performance Shares

The Company periodically grants restricted stock awards that vest upon time-based service conditions. Dividend payments are made during the vesting period. The value of restricted stock is determined to be the current value of the Company’s stock, and this total value will be recognized as compensation expense over the vesting period. As of September 30, 2023, there was $4.6 million of total unrecognized compensation cost related to non-vested time-based restricted stock. The cost is expected to be recognized evenly over the remaining 2.0 years of the restricted stock’s vesting period.

The Company periodically grants performance shares that give plan participants the opportunity to earn between 0% and 150% of the number of performance shares granted based on achieving certain market conditions. The number of performance shares earned is determined by reference to the Company’s total shareholder return relative to a peer group of other publicly traded banks and bank holding companies during the performance period. The performance period is generally three years starting on the grant date. The fair value of the performance shares is determined using a Monte Carlo simulation model on the grant date. As of September 30, 2023, there was $895,000 of total unrecognized compensation cost related to non-vested performance shares. As of September 30, 2023, non-vested performance shares had a weighted average remaining time to vest of 1.3 years.

	Restricted Stock					Performance Shares
	Shares			Weighted Average Grant Date Fair Value		Shares		Weighted Average Grant Date Fair Value
Nine Months Ended September 30, 2023:
Non-vested at January 1, 2023		141,580		$	56.39		23,852	$	54.16
Granted		49,415			60.29		8,091		70.29
Vested		(31,492	)		52.22		-		-
Forfeited		(11,733	)		64.78		-		-
Non-vested at September 30, 2023		147,770		$	57.92		31,943	$	58.25
Nine Months Ended September 30, 2022:
Non-vested at January 1, 2022		127,602		$	42.27		12,437	$	37.05
Granted		52,819			83.33		11,415		72.81
Vested		(26,563	)		43.51		-		-
Forfeited		(8,206	)		61.70		-		-
Non-vested at September 30, 2022		145,652		$	55.84		23,852	$	54.16