Note 11 - Stock Option Plan

12 Months Ended

Dec. 31, 2024

Share-Based Payment Arrangement [Text Block]

NOTE 11 — STOCK OPTION PLAN

The Company currently has one equity based incentive plan, the Oak Valley Bancorp 2018 Stock Plan. The 2018 Stock Plan provides for awards in the form of incentive stocks, non-statutory stock options, stock appreciation rights and restrictive stocks. Under the 2018 Plan, the Company is authorized to issue 607,500 shares of its common stock to key employees and directors as incentive and non-qualified stock options, respectively, at a price equal to the fair value on the date of grant. The Plan provides that the options are exercisable in equal increments over a five-year period from the date of grant or over any other schedule approved by the Board of Directors. All incentive stock options expire no later than ten years from the date of grant. As of December 31, 2024, 392,880 shares were available to be issued under the 2018 Stock Plan pursuant to new grants.

A summary of the status of the Company’s restricted stock and changes during the years ended December 31, 2024 and 2023 are presented below.

		DECEMBER 31, 2024				DECEMBER 31, 2023
	Shares			Weighted Average Grant Date Fair Value		Shares			Weighted Average Grant Date Fair Value
Unvested at beginning of year		92,991		$	21.96		82,023		$	18.43
Issued		72,269		$	24.31		43,446		$	26.46
Vested		(30,603	)	$	20.55		(32,178	)	$	19.08
Forfeited		(1,950	)	$	22.75		(300	)	$	17.85
Unvested at end of year		132,707		$	23.40		92,991		$	21.96

The Company issued 72,269 shares of restricted stock in 2024 with a weighted average fair value of $24.31 per share. For the year ended December 31, 2024, total compensation expense recorded in the consolidated statements of income related to restricted stock awards was $844,000, with an offsetting tax benefit of $249,000, as this expense is deductible for income tax purposes. The Company recorded a tax benefit of $45,000 to income tax expense to adjust for the full tax deduction of the vested restricted stock, which is equal to the fair value on the vesting date, as the tax benefit from the restricted stock expense is based on the grant date fair value. As of December 31, 2024, there was $2,516,000 of total unrecognized compensation cost related to restricted stock awards which is expected to be recognized over a weighted-average period of 3.60 years. During 2024, shares of restricted stock awards totaling 30,603 with a fair value of $782,000, based on the vested date of each award, were vested and became unrestricted.

The Company issued 43,446 shares of restricted stock in 2023 with a weighted average fair value of $26.46 per share. For the year ended December 31, 2023, total compensation expense recorded in the consolidated statements of income related to restricted stock awards was $533,000, with an offsetting tax benefit of $158,000, as this expense is deductible for income tax purposes. The Company recorded a tax benefit of $73,000 to income tax expense to adjust for the full tax deduction of the vested restricted stock, which is equal to the fair value on the vesting date, as the tax benefit from the restricted stock expense is based on the grant date fair value. As of December 31, 2023, there was $1,647,000 of total unrecognized compensation cost related to restricted stock awards which is expected to be recognized over a weighted-average period of 3.67 years. During 2023, shares of restricted stock awards totaling 32,178 with a fair value of $861,000, based on the vested date of each award, were vested and became unrestricted.

Oak Valley Bancorp 10-K