Note 5 - Stockholders' Equity and Stock-based Compensation

12 Months Ended

Dec. 31, 2024

Notes to Financial Statements

Shareholders' Equity and Share-Based Payments [Text Block]

5.    STOCKHOLDERS’ EQUITY AND STOCK-BASED COMPENSATION

Stockholders’ Equity

Employee Stock Purchase Plan:

The Company offers an Employee Stock Purchase Plan (the “ESPP”) that is open to all employees working more than 15 hours per week. Shares of the Company’s common stock may be purchased by employees at six-month intervals at 85% of the fair market value of one share of common stock at the beginning or end of each stock purchase period or phase. Employees purchased 14,583 and 12,700 shares in 2024 and 2023, respectively. As of December 31, 2024, a total of 381,417 shares have been issued from the 450,000 shares authorized.

KSOP:

The Company offers a KSOP Plan (the “KSOP”) that includes the Employee Stock Ownership Plan (the “ESOP”) and the 401(k) Plan. The KSOP allows the Company to use Company stock to match contributions from its employees should it so choose. The KSOP is available to eligible employees who had completed six months of service. Beginning January 1, 2016, the matching of employee contributions were issued in Company stock. Employer contributions charged to operations for stock matching of employee contributions for the year ended December 31, 2024 and 2023 totaled approximately $876,000 and $851,000, respectively.

Stock-Based Compensation

Stock-based compensation is recorded at fair value as of the date of grant, is included in the salaries and benefits expense line item on the consolidated statements of operations and amounted to approximately $572,000 and $528,000 for the years ended December 31, 2024 and 2023, respectively.

Stock Options:

The Company’s Stock Plan, as amended, (the “Plan”) provides for the granting of awards in the form of stock options, restricted stock, stock appreciation rights, and deferred stock to key employees and non-employees, including directors of and consultants to the Company and any subsidiary, to purchase up to a maximum of 1,650,000 shares of common stock. The Company currently has 135,238 shares available for grant under the Plan. The Plan is administered by the Board of Directors which determines the persons who are to receive awards under the Plan, the type of award to be granted, the number of shares subject to each award and, if an option, the exercise price of each option.

The Plan provides that payment of the exercise price may be made in the form of unrestricted shares of common stock already owned by the optionee. The Company calculates the fair market value of unrestricted shares as the average of the high and low sales prices on the date of the option exercise. The Company’s common stock is purchased upon the exercise of stock options, and restricted stock awards are settled in shares of the Company’s common stock.

The grant-date fair value of options outstanding and exercisable at December 31, 2024 and 2023 was $0. As of December 31, 2024, there are no options outstanding. 

There were no options granted in 2024 or 2023. The total fair value of options exercised during the years ended December 31, 2024 and 2023 was $0. The total intrinsic value of options exercised during 2024 and 2023 was $0.

Long Term Incentive Plan

The Long Term Incentive Plan (the “LTI Plan”) authorizes the grant of Long Term Incentive Awards that provide an opportunity to Named Executive Officers (“NEOs”) and other Senior Executives to receive a payment in cash or shares of the Company’s common stock to the extent of achievement at the end of a period greater than one year (the “Performance Period”) as compared to Performance Goals established at the beginning of the Performance Period. Beginning in 2020, and as a result of the COVID-19 pandemic, the Company temporarily suspended the granting of performance awards under its LTI Plan, and instead granted deferred stock awards designed to retain NEOs and other senior executives in lieu of LTI Plan awards from 2020 through 2024. In February 2022, the Compensation Committee made determinations regarding the achievement of 2021 performance goals and payouts under the 2019-2021 LTI Plan, which completed the performance period and awards under the 2019-2021 LTI Plan, and the last outstanding awards under the LTI Plan. Accordingly, there are no awards outstanding under the LTI Plan.

The Company did not record compensation expense related to the LTI Plan for 2024 or 2023.

Board of Directors Stock Option, Deferred Stock Awards, and Restricted Stock Grants

The Company’s Stock Plan was amended to authorize annual grants of restricted stock, deferred stock, stock options, or any combination of the three, to non-employee members of the Board of Directors at the time of the Company’s annual shareholders’ meeting as determined by the Board prior to each such meeting. Options granted under the Plan generally expire 10 years after the grant date. Restricted stock and deferred stock grants generally vest 100% one year after the date of the annual meeting at which they were granted, are subject to restrictions on resale for an additional year, and are subject to forfeiture if a board member terminates his or her board service prior to the shares vesting. The unvested deferred stock awards outstanding as of December 31, 2024 to our non-employee directors consists of only a grant of deferred stock on June 6, 2024 of 10,734 shares with a weighted average fair value per share of $22.35.

Below is a summary of changes in Board of Directors unvested deferred stock award grants as of December 31, 2024:

				Weighted
				Average
	Deferred			Fair Value
	Stock			Per Share
Non-Vested Balance, December 31, 2023		7,818		$	23.01
Granted		10,734			22.35
Vested		(7,818	)		23.01
Forfeited		—			—
Non-Vested Balance, December 31, 2024		10,734		$	22.35

Employee Deferred Stock Awards 

In 2024, the Company granted employees deferred stock awards totaling 22,100 shares of common stock, with a vesting term of approximately four years and a fair value of $21.08 per share. In 2023, the Company granted employees deferred stock awards totaling 19,020 shares of common stock, with a vesting term of approximately four years and a fair value of $25.52 per share. The vesting schedule of the awards is as follows: (i) 25% vesting and being issued in  March 2025, (ii) 25% vesting and being issued in  March 2026, (iii) 25% vesting and being issued in  March 2027 and (iv) 25% vesting and being issued in  March 2028. The compensation cost associated with these grants of deferred stock awards are recorded in “Salaries and benefits” on the Consolidated Statements of Operations. 

A summary of the changes in employee unvested deferred stock award grants as of December 31, 2024, is as follows:

				Weighted
				Average
	Deferred			Fair Value
	Stock			Per Share
Non-Vested Balance, December 31, 2023		36,920		$	22.00
Granted		22,100			21.08
Vested		(15,230	)		19.15
Forfeited		—			—
Non-Vested Balance, December 31, 2024		43,790		$	22.52

At December 31, 2024, there was approximately $770,000 of total unrecognized stock-based compensation expense related to unvested employee and board of director deferred stock awards that is expected to be recognized over a period of approximately 2.3 years.