Stock-Based Compensation

9 Months Ended

Sep. 30, 2025

Share-Based Payment Arrangement [Abstract]

17)

STOCK-BASED COMPENSATION

The Company accounts for stock-based compensation under the fair value recognition provisions of ASC Topic 718 - Compensation - Stock Compensation. The Company recognizes stock-based compensation cost over the award’s requisite service period on a straight-line basis for time-based restricted stock grants and performance-based restricted stock grants. The Company records forfeitures as they occur for all stock-based compensation.

The following table presents the Company's total stock-based compensation expense:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2025		2024		2025		2024
Employee stock-based compensation expense
Pre-tax	$	926	$	556	$	2,872	$	1,593
Post-tax (1)		732		439		2,269		1,258
Director stock-based compensation expense
Pre-tax		121		138		379		310
Post-tax (1)		96		109		300		245

(1) The after-tax amounts are determined using the 21% corporate federal tax rate.

The Company had approximately $4,819,000 of unrecognized stock compensation expense at September 30, 2025 related to non-vested stock-based compensation granted, which it expects to recognize over a weighted-average period of approximately 1.9 years. The Company had approximately $304,000 of unrecognized director stock-based compensation expense at September 30, 2025 related to non-vested director stock-based compensation granted, which it expects to recognize over a weighted-average period of approximately 0.6 years.

Restricted stock, restricted stock units and performance stock units

Stock-based compensation cost for restricted stock awards, restricted stock units and performance stock units is measured based on the closing fair market value of the Company's common stock on the date of grant, which vest in equal installments over the requisite service period of typically three years. Restricted stock awards granted to non-employee directors vest over a one-year period. Each restricted stock unit and performance stock unit represents the Company's obligation to deliver to the holder one share of common stock upon vesting.

Performance stock units vest based on the Company's return on average equity compared to a defined group of peer companies. On the grant date, the Company issues the target number of performance stock units. They are subject to forfeitures if performance goals are not met. The actual number of performance stock units earned can vary from zero to 150 percent of the target for the awards.

The Company granted 19,435 and 96,967 shares of restricted common stock during the three months ended September 30, 2025 and 2024, respectively, which had a weighted-average grant date fair value of $10.76 and $7.88, respectively. The Company granted 466,672 and 598,713 shares of restricted common stock during the nine months ended September 30, 2025 and 2024, respectively, which had a weighted-average grant date fair value of $11.48 and $7.41, respectively.

The following table presents certain information related to the activity of the Company's non-vested restricted common stock grants:


	Number of Restricted Shares		Weighted Average Grant Date Fair Value
Outstanding as of December 31, 2024		606,411	$	6.23
Granted		466,672		11.48
Less: Forfeited		1,009		11.59
Less: Vested		494,793		5.29
Outstanding as of September 30, 2025		577,281	$	10.12

Stock options

Stock option fair value was estimated on the grant date using the Black-Scholes-Merton formula. Stock options vest in equal installments over the requisite service period of typically three years. The following weighted-average assumptions were used to value the stock options granted:


	2025			2024
Expected annual dividend yield		—	%		—	%
Expected volatility		88.51	%		86.92	%
Risk-free interest rate		3.87	%		4.37	%
Expected term	6 years			6 years

The expected annual dividend yield for options granted during 2025 and 2024 is based on no dividends being paid in future quarters. The expected volatility is a historical volatility calculated based on the daily closing prices over a period equal to the expected term. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the grant date. Expected term takes into account the three-year graded vesting term and the 10-year contractual term of the option.

The Company granted 76,141 and 196,275 stock options for the nine months ended September 30, 2025 and 2024, respectively, which had a weighted average grant date fair value of $11.63 and $4.82 per share, respectively.

The following table presents certain information related to the activity of the Company's stock option grants:


	Number of Stock Options		Weighted Average Exercise Prices		Weighted Average Remaining Contractual Term (years)		Aggregate Intrinsic Value (2)
Outstanding as of December 31, 2024		1,130,035	$	4.12		7.21	$	10,202,000
Granted		76,141		11.63		—		—
Less: Forfeited		—		—		—		—
Less: Expired		—		—		—		—
Less: Exercised		240,446		3.17		—		—
Outstanding as of September 30, 2025		965,730	$	4.95		6.76	$	6,514,000

Vested as of September 30, 2025 ⁽¹⁾		1,475,570	$	4.24		6.28	$	5,996,000
Exercisable as of September 30, 2025		799,869	$	4.24		6.28	$	5,996,000

(1) The vested shares are calculated based on all vested shares at September 30, 2025, inclusive of those that have since expired. The weighted average exercise prices, weighted-average remaining contractual term and aggregate intrinsic value is calculated based on only vested shares that are outstanding and exercisable at September 30, 2025.

(2) Presented in ones.