Note 9. Stock-Based Compensation

Restricted Stock Units:

The Company grants restricted stock units (“RSUs”) to certain employees, officers, and members of the Board of Directors under the Commercial Bancgroup, Inc. 2025 Omnibus Incentive Plan . The equity incentive plan allows for the issuance up to 850,000 (subject to automatic annual increases in accordance with the terms of the plan) shares of our common stock pursuant to the plan. Each RSU represents the right to receive one share of the Company’s common stock upon vesting. RSUs do not carry voting rights or dividend rights until the underlying shares are issued.

RSUs are subject solely to time based vesting conditions and generally vest over a service period of one to three years, with vesting occurring in equal annual installments, provided the grantee remains in continuous service with the Company through the applicable vesting date.

The grant date fair value of RSUs is measured based on the closing market price of the Company’s common stock on the grant date. Compensation cost related to RSUs is recognized on a straight line basis over the requisite service period and is recorded in the consolidated statements of operations within salaries and employee benefits. The Company accounts for forfeitures as they occur. 

The following table summarizes RSU activity for the quarter ended March 31, 2026:

As of March 31, 2026, unrecognized compensation cost related to unvested RSUs was $1,236,145, which is expected to be recognized over a weighted average remaining vesting period of 2.44 years.

Upon vesting of RSUs, the Company may withhold shares to satisfy statutory tax withholding requirements. Shares withheld for tax purposes are accounted for as equity transactions and are recorded as a reduction to additional paid in capital. Cash paid for employee tax withholding obligations is classified as a financing activity in the consolidated statements of cash flows.

RSUs do not accrue dividend equivalents prior to vesting. Dividends declared on shares issued upon vesting of RSUs are recognized in the period in which such dividends are paid.

Stock based compensation expense related to RSUs was $159,414, and $0 for the three months ended March 31, 2026, and 2025, respectively. Recognized tax benefit was not material for the quarter ended March 31, 2026.