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 March 31,
	2026		2025
Employee stock-based compensation expense
Pre-tax (1)	$	1,010	$	598
Post-tax (2)		798		472
Director stock-based compensation expense
Pre-tax (1)		119		135
Post-tax (2)		94		107

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

The Company had approximately $3,402,000 of unrecognized stock compensation expense at March 31, 2026 related to non-vested stock-based compensation granted, which it expects to recognize over a weighted-average period of approximately 1.8 years. The Company had approximately $65,000 of unrecognized director stock-based compensation expense at March 31, 2026 related to non-vested director stock-based compensation granted, which it expects to recognize over a weighted-average period of approximately 0.1 years.

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 vests 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 46,303 and 33,832 shares of restricted common stock during the three months ended March 31, 2026 and 2025, respectively, which had a weighted-average grant date fair value of $11.36 and $12.01, 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, 2025		576,781	$	10.12
Granted		46,303		11.36
Less: Forfeited		—		—
Less: Vested		19,081		10.06
Outstanding as of March 31, 2026		604,003	$	10.21

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 as of the balance sheet dates, March 31, 2026 and December 31, 2025:


	2026			2025
Expected annual dividend yield		—	%		—	%
Expected volatility		—	%		88.51	%
Risk-free interest rate		—	%		3.87	%
Expected term	N/A			6 years

The expected annual dividend yield for options granted during 2025 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 did not grant any stock options for the three months ended March 31, 2026 and 2025.

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 (1)
Outstanding as of December 31, 2025		965,730	$	4.95		6.50	$	6,949,000
Granted		—		—		—		—
Less: Forfeited		—		—		—		—
Less: Expired		—		—		—		—
Less: Exercised		—		—		—		—
Outstanding as of March 31, 2026		965,730	$	4.95		6.26	$	6,395,000

Vested and Exercisable as of March 31, 2026		799,869	$	4.24		5.78	$	5,890,000

(1) Presented in ones.