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Stock-based Compensation and Benefits

9 Months Ended

Sep. 30, 2025

Stock-based Compensation and Benefits

Stock-based Compensation and Benefits

Note 11 Stock-based Compensation and Benefits

The Company provides stock-based compensation in accordance with shareholder-approved plans.

To date, the Company has issued stock options, restricted stock and PSUs under the plans. The Compensation Committee sets the option exercise price at the time of grant, but in no case is the exercise price less than the fair market value of a share of company common stock at the date of grant.

Stock options

At September 30, 2025 and 2024, the Company had 546,546 and 625,115 stock options outstanding, respectively, at a weighted average exercise price of $32.96 and $32.60, respectively. No stock options were granted during the nine months ended September 30, 2025. Stock option expense is a component of salaries and benefits in the consolidated statements of operations and totaled $15.3 thousand and $68.7 thousand for the three and nine months ended September 30, 2025, respectively. During the three and nine months ended September 30, 2024, stock option expense totaled $57.1 thousand and $263.8 thousand, respectively. At September 30, 2025, there was $35.2 thousand of total unrecognized compensation cost related to non-vested stock options granted under the plans. The cost is expected to be recognized over a weighted average period of 0.6 years.

Restricted stock awards

The Company issues time-based restricted stock awards that generally vest over a range of a 1-3 year period. Restricted stock with time-based vesting was valued at the fair value of the shares on the date of grant as they are assumed to be held beyond the vesting period.

Performance stock units

The Company grants PSUs whereby the recorded fair value represents the value of the award at the initial target performance and does not reflect potential increases or decreases resulting from the final performance results, which are to be determined at the end of the three-year performance period (vesting date). The actual number of shares to be awarded at the end of the performance period will range from 0% - 150% of the initial target awards. For PSU components granted in 2025, one-third of the award is based on the Company’s cumulative earnings per share (EPS target), one-third is based on the Company’s relative ROTA, and one-third is based on the Company’s cumulative TSR during the performance period. On the vesting date, the Company’s annual ROTA will be compared

to the respective ROTAs of companies comprising the S&P 600 Regional Banks group. The Company’s ranking will be averaged over the measurement period to determine the shares awarded. The fair value of the ROTA award was determined based on the closing stock price of the Company’s common stock on the grant date. On the vesting date, the Company’s TSR will be compared to the respective TSRs of the companies comprising the S&P 600 Regional Banks group at the grant date to determine the shares awarded. The fair value of the TSR target portion of the award was determined using a Monte Carlo Simulation at the grant date. The fair value of the EPS target portion of the award was determined based on the closing stock price of the Company’s common stock on the grant date.

For the awards granted during the nine months ended September 30, 2025, the weighted-average grant date fair value per unit of the EPS target portion, ROTA target portion and TSR target portion was $38.44, $38.44, and $32.19, respectively. The initial weighted-average performance price for the TSR target portion granted during 2025 was $45.14. During the nine months ended September 30, 2025, the Company awarded an additional 3,723 PSUs due to final performance results related to PSUs granted in 2022.

The following table summarizes restricted stock and PSU activity during the nine months ended September 30, 2025:


				Weighted					Weighted
		Restricted		average grant-			Performance		average grant-
		stock shares		date fair value			stock units		date fair value
Unvested at December 31, 2024		292,014		$	34.43		198,264		$	34.31
Granted		169,687			38.07		74,628			36.10
Adjustment due to performance		—			—		3,723			55.54
Vested		(103,216)			35.69		(51,658)			39.63
Forfeited		(26,535)			35.80		(8,712)			33.41
Unvested at September 30, 2025		331,950		$	35.79		216,245		$	34.06

As of September 30, 2025, the total unrecognized compensation cost related to the non-vested restricted stock awards and PSUs totaled $6.5 million and $4.1 million, respectively, and is expected to be recognized over a weighted average period of approximately 2.1 years and 2.0 years, respectively. Expense related to non-vested restricted stock awards totaled $1.6 million and $4.2 million during the three and nine months ended September 30, 2025, respectively, and $1.4 million and $3.8 million during the three and nine months ended September 30, 2024, respectively. Expense related to non-vested PSUs totaled $0.5 million and $1.6 million during the three and nine months ended September 30, 2025, respectively, and $0.6 million and $1.6 million during the three and nine months ended September 30, 2024, respectively. Expense related to non-vested restricted stock awards and PSUs is a component of salaries and benefits expense in the Company’s consolidated statements of operations.

Employee stock purchase plan

The 2014 ESPP is intended to be a qualified plan within the meaning of Section 423 of the Internal Revenue Code of 1986 and allows eligible employees to purchase shares of common stock through payroll deductions up to a limit of $25,000 per calendar year and 2,000 shares per offering period. The price an employee pays for shares is 90.0% of the fair market value of Company common stock on the last day of the offering period. The offering periods are the six-month periods commencing on March 1 and September 1 of each year and ending on August 31 and February 28 (or February 29 in the case of a leap year) of each year. There are no vesting or other restrictions on the stock purchased by employees under the ESPP. Under the ESPP, the total number of shares of common stock reserved for issuance totaled 400,000 shares, of which 196,759 was available for issuance at September 30, 2025.

Under the ESPP, employees purchased 17,771 shares and 21,389 shares during the nine months ended September 30, 2025 and 2024, respectively.