Note 8 – Stock-Based Compensation

The Company has granted restricted stock awards (“time-based RSAs”) to employees and directors, and PSAs to employees, under equity incentive plans that have been approved by the Company's shareholders. Time-based RSAs are measured at grant-date fair value, based on the market price of the Company's common stock on the grant date, and the compensation expense is recognized on a straight-line basis over the requisite service period, which is generally three years. Time-based RSAs carry voting rights and nonforfeitable rights to dividends. PSAs vest at the end of a specified performance period contingent upon the Company's achievement of financial performance goals. Compensation expense for PSAs is recognized over the performance period when achievement of the performance condition is considered probable, with periodic adjustments made as necessary. The performance goals for PSAs are generally based on a profitability measure for the Company, as established by the Company's board of directors, or a committee thereof. PSAs carry voting rights and rights to dividends that are paid only if and when the PSAs vest.

Stock-based compensation expense, reported as a component of salaries and employee benefits in the consolidated statements of operations, was $0.8 million and $0.3 million for the three months ended March 31, 2026 and 2025, respectively.

Total unrecognized compensation expense related to time-based RSAs and PSAs as of March 31, 2026 totaled $5.1 million. The ultimate amount of expense recognized is dependent upon the achievement of performance goals, which are generally established for specific fiscal years.