Note 7 - Shareholders' Equity

3 Months Ended

Mar. 31, 2025

Notes to Financial Statements

Equity [Text Block]

7. Shareholders’ Equity

	Three Months Ended March 31, 2025
			Accumulated
			Other					Capital in							Total
	Retained		Comprehensive			Common		Excess of				Treasury			Shareholders'
(in thousands)	Earnings		Loss			Stock		Par Value		ESOT		Stock			Equity
December 31, 2024	$	11,331	$	(2,059	)	$	526	$	14,828	$	-	$	(1,122	)	$	23,504
Retirement benefits adjustment		-		17			-		-		-		-			17
Stock based compensation		-		-			-		34		-		12			46
Net Income		128		-			-		-		-		-			128
March 31, 2025	$	11,459	$	(2,042	)	$	526	$	14,862	$	-	$	(1,110	)	$	23,695

	Three Months Ended March 31, 2024
				Accumulated
				Other					Capital in								Total
	Retained			Comprehensive			Common		Excess of					Treasury			Shareholders'
(in thousands)	Earnings			Loss			Stock		Par Value		ESOT			Stock			Equity
December 31, 2023	$	12,954		$	(2,389	)	$	525	$	14,617	$	(56	)	$	(1,157	)	$	24,494
Retirement benefits adjustment		-			19			-		-		-			-			19
Stock based compensation		-			-			-		44		-			19			63
Net Loss		(383	)		-			-		-		-			-			(383	)
March 31, 2024	$	12,571		$	(2,370	)	$	525	$	14,661	$	(56	)	$	(1,138	)	$	24,193

Earnings Per Share

Basic earnings per share is computed by dividing net earnings by the weighted average number of common shares outstanding during the period. The weighted average number of common shares outstanding does not include any potentially dilutive securities or any unvested restricted shares of common stock. These unvested restricted shares, although classified as issued and outstanding, are considered forfeitable until the restrictions lapse and will not be included in the basic EPS calculation until the shares are vested. Diluted earnings per share is computed by dividing net earnings by the weighted average number of common shares outstanding during the period plus the number of shares of common stock that would be issued assuming all contingently issuable shares having a dilutive effect on the earnings per share were outstanding for the period. The dilutive effect of unvested restrictive stock is determined using the treasury stock method. However, if the assumed common shares are anti-dilutive, basic and diluted earnings per share are the same.

	Three Months Ended
	March 31,
(in thousands)	2025			2024
Income (loss) from continuing operations	$	145		$	(366	)
Loss from discontinued operation		(17	)		(17	)
Net income (loss)	$	128		$	(383	)
Weighted average common shares outstanding (basic)		2,520			2,490
Unvested restricted stock		22			29
Weighted average common shares outstanding (diluted)		2,542			2,519
Basic and diluted income (loss) earnings per share:
Continuing operations	$	0.06		$	(0.15	)
Discontinued operation		(0.01	)		(0.01	)
Basic and diluted income (loss) per share	$	0.05		$	(0.16	)

Stock-Based Compensation

The Company’s 2022 Equity Incentive Plan (“Equity Plan”) was approved by the shareholders at the 2022 Annual Meeting of Shareholders. The Equity Plan allows for various types of awards (rights) to be granted, including incentive stock options, non-qualified stock options, stock appreciation rights, restricted awards, performance share awards, cash awards, or any other equity-based awards.  The total number of awards under the Equity Plan are limited to a maximum of 200,000 authorized common shares.

The Company’s executive compensation program established by the Board of Directors (Board) determines the type of awards available to the Company’s executives. The program consists of a cash incentive plan and a long-term incentive plan (“LTIP”) that are awarded annually.  The LTIP includes service-based (restricted) share awards that vest annually over three years, and performance-based (restricted) share awards that cliff-vest based on the achievement of a financial metric over a specified three-year period. 

On February 19, 2025, 6,493 service-based shares were granted to Company executives under the 2025-2027 LTIP Stock Award. On March 26, 2024, 7,180 service-based shares were granted to Company executives under the 2024-2026 LTIP Stock Award.

The Company’s director compensation policy provides that non-employee directors receive a portion of their annual retainer in the form of restricted shares under the Equity Plan.  These shares vest quarterly over a twelve-month service period, have voting rights, and any dividends declared and paid during the restricted period accrue and are paid upon vesting.  The aggregate amount of expense to the Company, measured based on the grant date fair value, is recognized over the requisite service period.  

A summary of the status of restricted (service-based) share awards granted is presented below:

				Weighted Average
				Grant Date Fair
	Shares			Value
Service-Based Share Activity:
Unvested at December 31, 2024		17,976		$	11.96
Granted in 2025		6,493		$	10.26
Vested in 2025		(1,996	)	$	12.53
Unvested at March 31, 2025		22,473		$	11.42

Included in the three-month periods ended March 31, 2025, and 2024 is approximately $46,000 and $63,000, respectively, of stock-based compensation expense related to the service-based and director share awards. The Company has approximately $169,000 of stock-based compensation expense related service-based shares to be recognized over the requisite service periods.

Restricted, performance-based share awards represent a right to receive a certain number of shares of common stock based on the achievement of corporate performance goals and continued employment during the performance period. Performance-based share awards granted to executives' vest at the end of a three-year period and are not issued until the performance period is complete and the metrics are achieved. Vested and issued shares may range from 0% to a maximum of 200% of targeted amounts depending on the achievement of performance measures at the end of a three-year period. The expected cost of the shares is based on the date of grant fair value and the Company’s assessment of the probability that the performance condition will be achieved at target (100%). Any related compensation expense is recognized when the probability is likely that the performance criteria will be achieved. Forfeitures are recognized as they occur. These awards may be settled in cash or shares of common stock at the election of the Company on the date of grant. It is the Company’s intent to settle performance-based share awards with shares of common stock.

On February 19, 2025, 19,482, performance-based share awards (at target) were granted to Company executives under the 2025-2027 LTIP Stock Award at a grant date fair value of $10.26 per share. On March 26, 2024, 21,541 performance-based share awards (at target) were granted to Company executives under the 2024-2026 LTIP Stock Award at a grant date fair value of $12.63 per share. On December 13, 2023, 17,380 performance-based share awards (at target) were granted to Company executives under the 2023-2025 LTIP Stock Award at a grant date fair value of $11.50 per share. 

A summary of the status of performance-based share awards granted is presented below:

			Weighted Average
			Grant Date Fair
	Shares		Value
Performance-Based Share Activity:
Unvested at December 31, 2024		33,205	$	12.04
Granted in 2025		19,482	$	10.26
Vested in 2025		-	$	-
Unvested at March 31, 2025		52,687	$	11.38

No stock-based compensation expense related to performance-based share awards is included in the three-month periods ended March 31, 2025, and 2024, as the probability of achieving the financial metric required for vesting and issuance of the share awards is deemed not probable for the 2023-2025, 2024-2026, and 2025-2027 LTIP Stock Awards granted to executives. The maximum potential stock-based compensation expense for the performance-based share awards under the 2023-2025, 2024-2026, and 2025-2027 LTIP Stock Awards is approximately $1,200,000.