Share-Based Compensation

9 Months Ended

Sep. 30, 2023

Note 8. Share-Based Compensation

Employee Stock Purchase Plan

The Company has adopted an ESPP and offers share-based compensation through its equity compensation plan. Share-based compensation arrangements may include stock options, restricted and unrestricted stock awards, restricted stock units, performance units and stock appreciation rights. Accounting standards require all share-based payments to employees and non-employee directors to be valued using a fair value method on the date of grant and to be expensed based on that fair value over the applicable vesting period. The Company accounts for forfeitures during the vesting period as they occur.

Under the Company’s ESPP, substantially all employees of the Company and its subsidiaries can authorize a specific payroll deduction from their base compensation for the periodic purchase of the Company’s common stock. Shares of stock are issued quarterly at a discount to the market price of the Company’s stock on the day of purchase, which can range from 0-15% and was set at 5% for 2022 and for the first nine months of 2023.

Total stock purchases under the ESPP amounted to 5,453 shares during the nine months ended September 30, 2023. At September 30, 2023, the Company had 216,325 remaining shares reserved for issuance under the ESPP.

Incentive Stock Plan

The Incentive Stock Plan permits the issuance of up to 300,000 shares of common stock for awards to key employees and non-employee directors of the Company and its subsidiaries in the form of stock options, restricted stock, restricted stock units, stock appreciation rights, stock awards and performance units. As of September 30, 2023, only restricted stock has been granted under the Incentive Stock Plan.

Restricted stock activity for the nine months ended September 30, 2023 is summarized below:

				Weighted Average
				Grant Date
	Shares			Fair Value
Nonvested, January 1, 2023		46,989		$	22.49
Issued		35,013			17.20
Vested		(25,926	)		20.25
Forfeited		(1,483	)		17.20
Nonvested, September 30, 2023		54,593		$	20.30

The weighted average period over which nonvested awards are expected to be recognized in compensation expense is 1.65 years.

The remaining unrecognized compensation expense for nonvested restricted stock shares totaled $650 thousand as of September 30, 2023 and $591 thousand as of September 30, 2022.

Stock-based compensation expense was $171 thousand and $121 thousand for the three months ended September 30, 2023 and 2022, respectively and $419 thousand and $295 thousand for the nine months ended September 30, 2023 and 2022, respectively.