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Share-Based Compensation

3 Months Ended

Mar. 31, 2026

Share-Based Compensation

Share-Based Compensation

Note 11 — Share-Based Compensation

Our 2012 and 2020 share-based compensation plans are long-term retention plans intended to attract, retain, and provide incentives for key employees and non-employee directors in the form of incentive and non-qualified stock options and RSUs. Our 2020 plan was adopted by our shareholders at our annual meeting on October 29, 2020. The 2020 plan was subsequently amended and restated during our annual meeting on April 24, 2024 to increase the number of shares of common stock available for future grants.

Stock Options

With the exception of non-qualified stock options granted to directors under the 2012 plans, which in some cases may be exercised at any time prior to expiration and in some other cases may be exercised at intervals less than a year following the grant date, incentive stock options granted under our 2012 plan may not be exercised in whole or in part within a year following the date of the grant, as these incentive stock options become exercisable in 25% increments pro ratably over the four-year period following the grant date. The options are granted at an exercise price at least equal to the fair value of the common stock at the date of grant and expire ten years from the date of grant. No options were granted under the 2012 plan after February 1, 2019, and the plan is closed other than for any options still unexercised and outstanding.

Activity in the Company’s stock option plans is summarized in the following table:




							Weighted
				Weighted			Average		Aggregate
				Average			Remaining		Intrinsic
		Shares		Price			(Yrs.)		(000’s)
Outstanding at January 1, 2026		28,815		$	61.00
Exercised		(6,018)			50.65
Expired		(278)			44.21
Outstanding at March 31, 2026		22,519			63.97		1.24		$	643
Exercisable at March 31, 2026		22,519			63.97		1.24		$	643

The fair value of options is estimated at the date of grant using the Black-Scholes option pricing model and expensed over the options’ vesting periods. There have been no stock options issued during the first three months of 2026. Because all outstanding stock options had vested as of December 31, 2025, there was no unrecognized compensation cost related to nonvested stock option grants under the plans or fair value of shares vested during the three months ended March 31, 2026. The intrinsic value of stock option shares exercised for the three months ended March 31, 2026 was $301,000.

Restricted Stock Units (“RSUs”)

From time-to-time, we also grant performance RSUs and time-vested RSUs to key employees, and time-vested RSUs to non-employee directors. These awards help align the interests of these employees with the interests of our shareholders by providing economic value directly related to our performance. Some performance RSU grants contain a three-year performance period while others contain a one to two-year performance period and a time-vested requirement (generally two to four years from the grant date). The performance-based awards for our long-term incentive plans are dependent on the achievement of tangible book value growth and return on average tangible common equity relative to the Company’s peer group during each three-year performance period. We communicate threshold, target, and maximum performance RSU awards and performance targets to the applicable key employees at the beginning of a performance period. With respect to some long-term incentive awards, dividend equivalents are accrued at the same rate as cash dividends paid for each share of the Company’s common stock during the performance or time-vested period, and subsequently paid when the shares are issued on the vesting or settlement date. Grants to non-employee directors typically vest within a 12-month period. The value of the RSUs awarded is established as the fair market value of the stock at the time of the grant. We recognize expense on a straight-line basis typically over the performance or time-vesting periods based upon the probable performance target, as applicable, that will be met.

Outstanding RSUs for the three months ended March 31, 2026 is summarized in the following table.


				Weighted-
				Average
				Grant-Date
Restricted Stock Units		Shares		Fair Value
Outstanding at January 1, 2026		820,878		$	86.43
Granted		413,496			93.74
Vested		(367,212)			81.11
Outstanding at March 31, 2026		867,162		$	92.17

If maximum performance is achieved pursuant to the 2024, 2025 and 2026 Long Term Incentive performance-based RSU grants, an additional 133,447 shares in total may be issued by the Company at the end of the three-year performance periods.

As of March 31, 2026, there was $56.1 million of total unrecognized compensation cost at target related to nonvested RSUs granted under the plan. This cost is expected to be recognized over a weighted-average period of 1.66 years as of March 31, 2026. The total fair value of RSUs vested and released during the three months ended March 31, 2026 was $37.6 million.