Quarterly report pursuant to Section 13 or 15(d)

Note 7 - Employee and Director Benefits

v3.24.3
Note 7 - Employee and Director Benefits
9 Months Ended
Sep. 30, 2024
Notes to Financial Statements  
Share-Based Payment Arrangement [Text Block]

NOTE 7 - EMPLOYEE AND DIRECTOR BENEFITS

 

Stock Incentive Plan

 

The Company has a stock incentive plan as described below. The compensation cost that has been charged to earnings for the plan was approximately $1.0 million and $2.8 million for the three and nine months ended September 30, 2024, respectively, and $929,000 and $2.7 million for the three and nine months ended September 30, 2023, respectively.

 

The Company’s 2009 Amended and Restated Stock Incentive Plan authorizes the grant of up to 5,550,000 shares and allows for the issuance of Stock Appreciation Rights, Restricted Stock, Stock Options, Non-stock Share Equivalents, Performance Shares or Performance Units. The plan allows for the grant of incentive stock options and non-qualified stock options, and option awards are granted with an exercise price equal to the fair market value of the Company’s common stock at the date of grant. The maximum term of the options granted under the plan is ten years.

 

The Company estimates the fair value of each stock option award using a Black-Scholes-Merton valuation model. Expected volatilities are based on the Company’s trading price history. The expected term for options granted is based on the short-cut method and represents the period of time that options granted are expected to be outstanding. The risk-free rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of grant.

 

There have not been any grants of stock options since October of 2019.

 

The following table summarizes stock option activity during the nine months ended September 30, 2024 and 2023:

 

                   

Weighted

         
           

Weighted

   

Average

         
           

Average

   

Remaining

   

Aggregate

 
           

Exercise

   

Contractual

   

Intrinsic

 
   

Shares

   

Price

   

Term (years)

   

Value

 
                           

(In Thousands)

 

Nine Months Ended September 30, 2024:

                               

Outstanding at January 1, 2024

    165,800     $ 24.35       2.9     $ 7,211  

Exercised

    (33,350 )     18.71       1.0       11,627  

Outstanding at September 30, 2024

    132,450     $ 25.69       2.6     $ 5,117  
                                 

Exercisable at September 30, 2024

    115,950     $ 22.95       1.7     $ 6,808  
                                 

Nine Months Ended September 30, 2023:

                               

Outstanding at January 1, 2023

    280,000     $ 19.43       3.0     $ 14,088  

Exercised

    (87,700 )     12.04       0.8       3,520  

Forfeited

    (1,000 )     34.09       5.3       18  

Outstanding at September 30, 2023

    191,300     $ 22.65       3.4     $ 6,235  
                                 

Exercisable at September 30, 2023

    139,300     $ 17.12       1.7     $ 5,051  

 

As of September 30, 2024, there was $4,000 of total unrecognized compensation cost related to non-vested stock options, which will be recognized during October 2024.

 

Restricted Stock and Performance Shares

 

The Company periodically grants restricted stock awards that vest upon time-based service conditions. Dividend payments are made during the vesting period. The value of restricted stock is determined to be the current value of the Company’s stock, and this total value will be recognized as compensation expense over the vesting period. As of September 30, 2024, there was $5.7 million of total unrecognized compensation cost related to non-vested time-based restricted stock. The cost is expected to be recognized evenly over the remaining 2.2 years of the restricted stock’s vesting period.

 

The Company periodically grants performance shares that give plan participants the opportunity to earn between 0% and 150% of the number of performance shares granted based on achieving certain market conditions. The number of performance shares earned is determined by reference to the Company’s total shareholder return relative to a peer group of other publicly traded banks and bank holding companies during the performance period. The performance period is generally three years starting on the grant date. The fair value of the performance shares is determined using a Monte Carlo simulation model on the grant date. As of September 30, 2024, there was $1.2 million of total unrecognized compensation cost related to non-vested performance shares. As of September 30, 2024, non-vested performance shares had a weighted average remaining time to vest of 1.7 years.

 

   

Restricted Stock

   

Performance Shares

 
   

Shares

   

Weighted Average Grant Date Fair Value

   

Shares

   

Weighted Average Grant Date Fair Value

 

Nine Months Ended September 30, 2024:

                               

Non-vested at January 1, 2024

    158,298     $ 58.08       31,944     $ 58.25  

Granted

    50,324       66.74       14,253       68.67  

Vested

    (46,938 )     45.61       (18,653 )     37.05  

Forfeited

    (5,696 )     53.50       (2,318 )     72.18  

Non-vested at September 30, 2024

    155,988     $ 64.79       25,226     $ 78.53  
                                 

Nine Months Ended September 30, 2023:

                               

Non-vested at January 1, 2023

    141,580     $ 56.39       23,852     $ 54.16  

Granted

    49,415       60.29       8,091       70.29  

Vested

    (31,492 )     52.22       -       -  

Forfeited

    (11,733 )     64.78       -       -  

Non-vested at September 30, 2023

    147,770     $ 57.92       31,943     $ 58.25