Note 18 - Stock Based Compensation

12 Months Ended

Dec. 31, 2024

Notes to Financial Statements

Share-Based Payment Arrangement [Text Block]

Note 18 – Stock Based Compensation

The Company’s stockholders approved the 2017 Equity Compensation Plan (“the Plan”) on May 23, 2017. The Plan eliminates all remaining issuable shares under previous plans and is the only outstanding plan as of December 31, 2024. On May 30, 2023, the Company's stockholders approved an amendment to the Plan that increased the maximum number of shares issuable to 1,200,000. Grants under the Plan can be in the form of stock options (qualified or non-qualified), restricted shares, deferred stock units or performance units. Shares available for grant and issuance under the Plan as of December 31, 2024 are approximately 332,638. The Company intends to issue all shares under the Plan in the form of newly issued shares.

As of both December 31, 2024 and December 31, 2023, the Company did not have any outstanding stock options. Restricted stock and deferred stock units typically have a three-year vesting period starting one year after the date of grant with one-third vesting each year. Restricted stock granted to new employees and board members may be granted with shorter vesting periods. Grants of performance units typically have a cliff vesting after three years or upon a change of control. All issuances are subject to forfeiture if the recipient leaves or is terminated prior to the awards vesting. Restricted shares have the same dividend and voting rights as common stock, while options, performance units and deferred stock units do not.

All awards are issued at the fair value of the underlying shares at the grant date. The Company expenses the cost of the awards, which is determined to be the fair market value of the awards at the date of grant, ratably over the vesting period. Forfeiture rates are not estimated but are recorded as incurred. Stock-based compensation expense was $4.6 million, $4.9 million and $4.9 million for the years ended December 31, 2024, 2023 and 2022, respectively.

Activity under the Company’s restricted shares for year ended December 31, 2024 was as follows:

				Weighted-
				Average
	Nonvested			Grant Date
	Shares			Fair Value
Nonvested as of December 31, 2023		115,805		$	17.85
Granted		73,943			19.09
Vested		(76,770	)		18.42
Forfeited		(2,638	)		18.97
Nonvested December 31, 2024		110,340		$	18.26

As of December 31, 2024, there was approximately $0.7 million of total unrecognized compensation cost related to nonvested restricted shares granted. The cost is expected to be recognized over a weighted average period of 1.1 years.

A summary of the status of unearned performance unit awards and the change during the period is presented in the table below:

						Weighted
						Average Grant
	Units			Units		Date Fair
	(expected)			(maximum)		Value
Unearned as of December 31, 2023		164,231				$	23.06
Awarded		91,691					19.01
Change in estimate - decrease		(19,616	)				17.93
Change in estimate - increase		16,667					28.79
Vested shares		(53,041	)				25.24
Cancelled		(10,260	)				23.10
Unearned as of December 31, 2024		189,672			302,196	$	21.52

As of December 31, 2024, the specific number of shares related to performance units that were expected to vest was 189,674, determined by actual performance in consideration of the established range of the performance targets, which is consistent with the level of expense currently being recognized over the vesting period. Should this expectation change, additional compensation expense could be recorded in future periods or previously recognized expense could be reversed. As of December 31, 2024, the maximum amount of performance units that ultimately could vest if performance targets were exceeded is 302,196. During the year ended December 31, 2024, 53,041 shares vested. A total of 28,971 shares were netted from the vested shares to satisfy employee tax obligations. The net shares issued from vesting of performance units during the year ended December 31, 2024 were 24,070 shares. As of December 31, 2024, compensation cost of approximately $1.5 million related to non-vested performance units not yet recognized is expected to be recognized over a weighted-average period of 1.8 years.

A summary of the status of unearned deferred stock units and the changes in deferred stock units during the period is presented in the table below:

				Weighted
				Average Grant
	Units			Date Fair
	(expected)			Value
Unearned as of December 31, 2023		188,348		$	22.11
Awarded		81,736			19.01
Vested shares		(80,888	)		23.05
Cancelled		(7,360	)		21.53
Unearned as of December 31, 2024		181,836		$	20.32

Any shares cancelled would result in previously recognized expense being reversed. A portion of the shares that vest will be netted out to satisfy the tax obligations of the recipient. During the year ended December 31, 2024, 80,888 shares vested. A total of 43,346 shares were netted from the vested shares to satisfy employee tax obligations. The net shares issued from vesting of deferred stock units during the year ended December 31, 2024 were 37,542 shares. As of December 31, 2024, compensation cost of approximately $1.1 million related to non-vested deferred stock units, not yet recognized, is expected to be recognized over a weighted-average period of 1.4 years.