Stock Based Compensation:

In April of 2026, the Company, with the approval of shareholders, created the 2026 Equity Incentive Plan (the “2026 Plan”). The 2026 Plan permits the award of up to one million shares to the Company’s directors and employees to attract and retain exceptional personnel, motivate performance and, most importantly, to help align the interests of the Company’s executives with those of the Company’s shareholders. The 2026 Plan replaced the 2022 Plan and the 2022 Plan has been sunset.  There were 19,272 service time based share awards granted under the 2026 Plan and 88,622 service time based share awards and 150,468 performance based share awards granted under the 2022 Plan during the six month period ended June 30, 2026, as shown in the table below. The actual number of performance based shares issued will depend on the relative performance of the Company’s average return on tangible equity compared to a group of peer companies over a three year vesting period, ending December 31, 2028. As of June 30, 2026, 980,728 shares were still available to be awarded from the 2026 Plan. 

The restricted stock awards were granted with a fair value price equal to the market price of the Company’s common stock at the date of the grant. Expense recognized was $712,000 and $1.4 million for the three and six months ended June 30, 2026, respectively. The expense recognized was $645,000 and $1.3 million for the three and six months ended June 30, 2025, respectively. As of June 30, 2026, there was $4.6 million of total unrecognized compensation expense related to the nonvested shares granted under the 2026 and 2022 Plans. The remaining cost is expected to be recognized over 2.7 years.

The following is the activity under the Plans during the six month period ended June 30, 2026.

The following is the activity under the Plans during the six month period ended June 30, 2025.

The 133,661 shares that vested during the six month period ended June 30, 2026 had a weighted average fair value of $13.64 per share.