Stock-Based Compensation Plans

3 Months Ended

Mar. 31, 2024

Share-Based Payment Arrangement [Abstract]

Stock-Based Compensation Plans

(7) Stock-Based Compensation Plans.

The Company has two Stock Option Plans (the 2006 Stock Incentive Plan and the 2016 Equity Incentive Option Plan) under which options for shares of common stock were granted to directors, officers and key employees. The 2016 plan permits the grant of stock options, stock appreciation rights, restricted stock awards, restricted stock units, or stock awards. The options awarded under the plans have similar characteristics. All stock options are non-qualified and expire ten years from the date of grant. Stock based compensation awarded to directors, officers and employees are exercisable immediately or become exercisable in cumulative installments of 20% or 25% at the end of each year following the date of grant. When stock options are exercised, the Company issues new shares after receipt of exercise proceeds and taxes due, if any, from the grantee. The number of common shares available for future issuance was 619,508 at March 31, 2024.

The Company utilizes the Black-Scholes valuation model for estimating fair value of stock compensation for options awarded to officers and employees. Each grant is evaluated based upon assumptions at the time of grant. The assumptions were no dividend yield, expected volatility between 28.5% and 41.2%, risk-free interest rate of 2.0% to 3.8% and expected life of 5.0 to 7.0 years.

The dividend yield of zero is based on the fact that the Company does not pay cash dividends and has no present intention to pay cash dividends. Expected volatility is estimated based on the Company’s historical experience over a period equivalent to the expected life in years. The risk-free interest rate is based on the U.S. Treasury constant maturity interest rate at the date of grant with a term consistent with the expected life of the options granted. The expected life calculation is based on the observed and expected time to exercise options by the employees.

The Company recorded the following Stock compensation expense in its consolidated statements of income (in thousands):

	Three Months ended
	March 31,
	2024		2023
Stock option grants	$	19		17
Restricted stock awards		301		257
Employee stock grant		—		50
	$	320		324

A Summary of changes in outstanding options is presented below (in thousands, except share and per share amounts):

			Weighted		Weighted	Weighted
	Number		Average		Average	Average
	Of		Exercise		Remaining	Grant Date
Options	Shares		Price		Term (yrs)	Fair Value(000's)
Outstanding at January 1, 2024		126,880	$	20.00	3.5	$	981
Time-based awards granted		12,200		31.44			150
Performance-based awards granted		20,330		31.44			250
Outstanding at March 31, 2024		159,410	$	22.33	4.5	$	1,381
Exercisable at March 31, 2024		126,880	$	20.00	3.2	$	981
Vested during three months ended March 31, 2024		—				$	—

The aggregate intrinsic value of exercisable in-the-money options was $1,358,000 and the aggregate intrinsic value of outstanding in-the-money options was $1,358,000 based on the market closing price of $61.40 on March 28, 2024 less exercise prices.

The unrecognized compensation cost of options granted to FRP employees but not yet vested as of March 31, 2024 was $331,000, which is expected to be recognized over a weighted-average period of 4.3 years.

A Summary of changes in restricted stock awards is presented below (in thousands, except share and per share amounts):

				Weighted		Weighted	Weighted
	Number			Average		Average	Average
	Of			Exercise		Remaining	Grant Date
Restricted stock	Shares			Price		Term (yrs)	Fair Value(000's)
Non-vested at January 1, 2024		109,454		$	26.47	2.8	$	2,897
Time-based awards granted		15,904			31.44			500
Performance-based awards granted		16,248			31.44			503
Vested		(8,684	)		29.16			(253	)
Non-vested at March 31, 2024		132,922		$	27.44	2.9	$	3,647

Total unrecognized compensation cost of restricted stock granted but not yet vested as of March 31, 2024 was $2,970,000 which is expected to be recognized over a weighted-average period of 3.1 years.