v3.26.1
Note 7 - Stock-based Compensation
 6 Months Ended
Jun. 30, 2026
Notes to Financial Statements  
Equity [Text Block]

7. STOCK-BASED COMPENSATION

 

In May 2022, the Company’s shareholders approved the 2022 Equity Incentive Plan (the “2022 Plan”), which provides for the grant of up to 576,550 shares of common stock, including 126,550 shares that remained available for grant under the 2013 Stock Option Plan when the 2022 Plan was adopted. The 2022 Plan provides for the grant of incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock, restricted stock units and other stock-based awards. The frequency, amount and terms of stock-based awards may be determined by the Board of Directors or its compensation committee, consistent with the terms and purposes of the 2022 plan.

 

In May 2013, the Company established the 2013 Stock Option Plan (the "2013 Plan") for which 35,292 shares of common stock are reserved. With the establishment of the Company’s 2022 Equity Incentive Plan no further options may be issued under the 2013 Plan, though options previously granted continue to be outstanding and governed by the 2013 Stock Option Plan.

 

Options granted during the six months ended June 30, 2026 consisted of 80,500 options granted under the 2022 Plan. No stock options were granted during the six months ended June 30, 2025. The fair value of each option granted in 2026 was estimated on the date of grant using the following assumptions.

 

  

2026

 

Weighted-average expected life of stock options (in years)

  6.0 

Weighted-average risk free interest rate

  3.98%

Weighted-average annualized volatility

  35.8%

Weighted-average dividend yields

  2.60%

Weighted-average fair value of options granted during the six months ended June 30, 2026

 $16.03 

 

A summary of the activity within the 2013 Plan follows: 

 

  

Shares

  

Weighted Average Exercise Price

  

Weighted Average Remaining Contractual Term in Years

  

Intrinsic Value

 

Options outstanding at January 1, 2025

  131,847  $22.58         

Options exercised

  (45,505)  22.64         

Options cancelled

  (3,200)  22.19         

Options outstanding at December 31, 2025

  83,142  $22.56         

Options cancelled

  (2,400) $24.40         

Options exercised

  (47,450)  23.24         

Options outstanding at June 30, 2026

  33,292  $21.45   1.3  $1,231,471 

Options exercisable at June 30, 2026

  33,292  $21.45   1.3  $1,231,471 

 

A summary of options activity within the 2022 Plan follows: 

 

  

Shares

  

Weighted Average Exercise Price

  

Weighted Average Remaining Contractual Term in Years

  

Intrinsic Value

 

Options outstanding at January 1, 2025

  210,200  $32.55         

Options granted

  30,803   31.09         

Options cancelled

  (21,980)  32.41         

Options exercised

  (5,100)  31.36         

Options outstanding at December 31, 2025

  213,923  $32.38         

Options granted

  80,500   50.30         

Options cancelled

  (2,920)  39.63         

Options exercised

  (15,097)  31.63         

Options outstanding at June 30, 2026

  276,406  $37.56   7.4  $5,770,219 

Options exercisable at June 30, 2026

  109,346  $32.00   6.5  $2,891,012 

Options expected to vest after June 30, 2026

  167,780  $41.17   8.1  $2,572,607 

 

As of June 30, 2026, there was $1.8 million in total unrecognized compensation cost related to non-vested stock options under the 2022 plan. That cost is expected to be recognized over a weighted average period of 2.4 years.  There were no unrecognized costs remaining under the 2013 plan as of June 30, 2026.

 

Information related to the stock options plans during the three months ended June 30, 2026 and 2025

 

  

2026

  

2025

 

    Fair value of options vested

 $-  $- 

Intrinsic value of options exercised

 $101,000  $243,000 

Cash received from option exercises

 $101,000  $254,000 

Tax benefit from option exercises

 $-  $2,000 

Compensation cost

 $150,000  $96,000 

Tax benefit associated with compensation cost

 $8,000  $5,000 

 

Information related to the stock options plans during the six months ended  June 30, 2026 and 2025

  

2026

  

2025

 

    Fair value of options vested

 $173,000  $193,000 

Intrinsic value of options exercised

 $1,525,000  $614,000 

Cash received from option exercises

 $1,489,000  $583,000 

Tax benefit from option exercises

 $220,000  $19,000 

Compensation cost

 $251,000  $163,000 

Tax benefit associated with compensation cost

 $14,000  $9,000 

   

During the six months ended June 30, 2026, the Company granted 35,400 restricted stock units with a weighted-average fair value of $47.07 per share and a weighted-average vesting period of 3 years. Compensation costs related to these units during the three months ended   June 30, 2026 and 2025, were $57,000 and $0 respectively. Compensation costs related to these units during the six months ended   June 30, 2026 and 2025, were $76,000 and $14,000 respectively.