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Stock-Based Compensation | 3 Months Ended
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Mar. 31, 2026
Share-Based Payment Arrangement, Noncash Expense [Abstract] |
Share-Based Payment Arrangement | Stock-Based Compensation In accordance with the requirements of ASC 718-10-30-3 and 35-2, the Company measures the cost of stock-based compensation based on the grant-date fair value of the award, recognizing the cost over the requisite service period, which is generally the vesting period. Beginning February 2026, the Company issued stock-based compensation in the form of time-vested restricted stock units (RSUs) and performance-vested restricted stock units (PSUs). The fair value of a PSU is estimated using a Monte Carlo simulation analysis while the fair value of a RSU is the common stock (CBSH) market price. Compensation expense for PSUs is recognized over the requisite service period based on the probable outcome of the performance conditions. RSUs and PSUs accrue forfeitable dividend equivalents which are paid in cash upon vesting. Dividend equivalents are included in compensation expense over the requisite service period. Prior to February 1, 2026, the Company issued stock-based compensation in the form of nonvested restricted stock awards and stock appreciation rights (SARs). The fair value of stock appreciation rights is estimated using the Black-Scholes option-pricing model while the fair value of a nonvested restricted stock award is the common stock (CBSH) market price. The expense recognized for stock-based compensation is included in salaries and employee benefits expense in the accompanying consolidated statements of income. The Company recognizes forfeitures as a reduction to expense only when they have occurred. Historically, most of the awards have been issued during the first quarter of each year. Total stock-based compensation expense charged against income was $6.2 million and $4.4 million in the three months ended March 31, 2026 and 2025, respectively. Restricted Stock Awards Nonvested restricted stock awards granted generally vest in 4 to 7 years and contain restrictions as to transferability, sale, pledging, or assigning, among others, prior to the end of the vesting period. Dividend and voting rights are conferred upon grant. A summary of the status of the Company’s nonvested share awards as of March 31, 2026, and changes during the three month period then ended, is presented below.
| Shares | Weighted Average Grant Date Fair Value
Nonvested at January 1, 2026 | 1,305,978 | $55.11 |
Granted | 206,153 | 53.81 |
Vested | (218,418) | 57.12 |
Forfeited | (9,476) | 53.44 |
Nonvested at March 31, 2026 | 1,284,237 | $54.57 |
Time-Vested Restricted Stock Units and Performance-Vested Restricted Stock Units RSUs generally vest after 3 to 4 years of continued service. PSUs are granted to key executives and vest at the end of a 3-year performance period. The number of shares ultimately earned is determined based on relative performance compared to peers over the performance period of the following equally weighted measures: Adjusted Return on Average Equity and Diluted EPS Growth. The earned PSU shares are further adjusted by a market condition modifier based on the Company's Total Shareholder Return relative to peers measured 3 years from the date of grant. RSUs and PSUs earn forfeitable cash dividend equivalents, which are paid in cash at the end of the vesting period, but do not carry voting rights. The fair value of RSUs are based on the closing common stock (CBSH) market price on the date of grant. To measure the probability distribution of performance of the market condition, the fair value of PSUs are estimated based on a Monte Carlo simulation analysis. The Company engages a third-party valuation expert to perform the Monte Carlo simulation, and the assumptions used are shown in the table below. A summary of the Company's time-vested restricted stock units and performance-vested restricted stock units as of March 31, 2026, and changes during the three month period ended, is presented below.
| Time-Vested Restricted Stock Units |  | Performance-Vested Restricted Stock Units
| Units | Weighted Average Grant Date Fair Value |  | Units | Weighted Average Grant Date Fair Value
Nonvested at January 1, 2026 | — | $— |  |  | — | $— |
Granted | 283,820 | 52.09 |  |  | 95,266 | 52.68 |
Adjustment (1) | — | — |  |  | — | — |
Vested | — | — |  |  | — | — |
Forfeited | (34) | 51.74 |  |  | — | — |
Nonvested at March 31, 2026 | 283,786 | $52.09 |  |  | 95,266 | $52.68 |
(1) Reflects the adjustment to target Granted PSUs, based on the current estimate of performance results. The current year Monte Carlo assumptions are shown in the table below.
Fair value on valuation date | $52.68 |
Assumptions: |
Dividend yield | — | %
Historical volatility | 25.7 | %
Risk-free interest rate | 3.5 | %
Expected term | 2.9 years
Stock Appreciation Rights Stock appreciation rights (SARs) are granted with exercise prices equal to the market price of the Company’s stock at the date of grant. SARs vest ratably over 4 years of continuous service and have contractual terms of 10 years. All SARs must be settled in stock under provisions of the plan. In determining compensation cost, the Black-Scholes option-pricing model is used to estimate the fair value of SARs on date of grant. A summary of SAR activity during the first three months of 2026 is presented below.
(Dollars in thousands, except per share data) | Rights | Weighted Average Exercise Price | Weighted Average Remaining Contractual Term | Aggregate Intrinsic Value
Outstanding at January 1, 2026 | 850,956 | $47.99 |  |  |
Granted | — | — |  |  |
Forfeited | (972) | 58.20 |  |  |
Expired | (1,220) | 52.33 |  |  |
Exercised | (55,429) | 27.25 |  |  |
Outstanding at March 31, 2026 | 793,335 | $49.42 |  | 4.8 years | $2,622 |

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