Share-Based Compensation

12 Months Ended

Dec. 31, 2023

Note 9. 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 for 2023 and 2022 was set at 5%.

Total stock purchases under the ESPP amounted to 7,425 shares during 2023 and 5,765 shares during 2022. At December 31, 2023, the Company had 214,353 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 December 31, 2023, only restricted stock had been granted under the Incentive Stock Plan.

Restricted stock activity for the year ended December 31, 2023 is summarized below.

				Weighted Average
				Grant Date
	Shares			Fair Value
Nonvested, January 1, 2023		46,989		$	22.49
Issued		35,763			17.21
Vested		(26,916	)		20.14
Forfeited		(2,176	)		18.25
Nonvested, December 31, 2023		53,660		$	20.32

The weighted average period over which nonvested awards are expected to be recognized in compensation expense is 1.43 years.

The fair value of restricted stock granted during the year ended December 31, 2023 and 2022 was $615 thousand and $558 thousand, respectively.

The remaining unrecognized compensation expense for nonvested restricted stock shares totaled $523 thousand as of December 31, 2023 and $493 thousand as of December 31, 2022.

Stock-based compensation expense was $546 thousand and $416 thousand for the years ended December 31, 2023 and 2022, respectively.