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STOCK-BASED COMPENSATION

3 Months Ended

Mar. 31, 2026

STOCK-BASED COMPENSATION

STOCK-BASED COMPENSATION

8. STOCK-BASED COMPENSATION

The 2017 Equity Compensation Plan (the “2017 Plan”) was replaced during 2025 and previously had a maximum number of 750,000 shares reserved for issuance. No further awards will be granted under the 2017 Plan, but the plan will remain in effect only so long as awards granted under the plan remain outstanding. The 2017 Plan was replaced during 2025 with the 2025 Omnibus Incentive Plan (the “2025 Plan”), which has a maximum of 600,000 shares reserved for issuance. The purpose of the 2025 Plan, similar to the 2017 Plan, is to promote the success of the Company by providing greater incentives to employees, non-employee directors, consultants and advisors to associate their personal financial interests with the long-term financial success of the Company, including its subsidiaries, and with growth in stockholder value, consistent with the Company’s risk management practices.

A summary of stock option activity for the three months ended March 31, 2026, follows:


							Weighted
				Weighted			Average		Aggregate
				Average			Remaining		Intrinsic
				Exercise			Contractual		Value
		Shares		Price			Term (Yrs)		(in thousands)
Options outstanding, beginning of period		17,800		$	11.99		0.5		$	—
Exercised		(9,300)			11.99
Options outstanding, end of period		8,500		$	11.99		0.2		$	—

Exercisable at end of period		8,500		$	11.99		0.2		$	—

There was no stock-based compensation expense associated with stock options for the three months ended March 31, 2026 and 2025. As of March 31, 2026, we do not have any unrecognized compensation expense associated with the stock options.

A summary of time vested restricted stock award activity for the three months ended March 31, 2026, follows:


				Weighted			Weighted
				Average			Average
				Grant-Date			Remaining
				Fair Value			Contractual
		Shares		Per Share			Term (Yrs)
Unvested restricted stock outstanding, beginning of period		60,250		$	12.97		3.0
Vested		(17,650)			13.59
Unvested restricted stock outstanding, end of period		42,600		$	12.71		3.0

Stock-based compensation expense for time vested restricted stock awards totaled $67 thousand and $31 thousand for the three months ended March 31, 2026 and 2025, respectively. As of March 31, 2026, unrecognized compensation expense associated with restricted stock awards was $504 thousand, which is expected to be recognized over the remaining contractual term.

A summary of performance-based restricted stock units (the “Units”) for the three months ended March 31, 2026, follows:


					Weighted		Weighted
					Average		Average
					Grant-Date		Remaining
					Fair Value		Contractual
		Shares			Per Share		Term (Yrs)
Unvested Units outstanding, beginning of period		319,960		$	12.36		1.3
Vested		(67,387)			14.58
Forfeited		(3,526)			13.52
Unvested Units outstanding, end of period		249,047			11.74		1.3

These Units are subject to service and performance conditions and vest based on the achievement of both conditions. Achievement of the performance condition will be determined at the end of the five-year performance period for awards granted prior to 2025 by evaluating the: (1) Company’s adjusted earnings per share compound annual growth measured for the performance period and (2) performance factor achieved. Achievement of the performance condition will be determined at the end of the three-year performance period for awards granted in 2025 by evaluating the: (1) Company’s return on average assets versus peers; (2) growth in noninterest bearing deposits versus peers; (3) total shareholder return versus peers; and (4) performance factor achieved. Payouts between performance levels will be determined based on straight line interpolation. Upon vesting, payout will be primarily Company common shares but based on the terms of the award and performance factor achieved some payouts may be in cash.

The Company recognized $42 thousand and zero stock-based compensation expense during the three months ended March 31, 2026, and 2025, respectively, as a result of the probability of a portion of the Units vesting. The potential unrecognized compensation expense associated with these Units was approximately $2 million and $3 million as of March 31, 2026 and December 31, 2025, respectively.