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 September 30,				Nine Months Ended September 30,
	2026		2025		2026		2025
Employee stock-based compensation expense
Pre-tax	$	1,036	$	926	$	3,648	$	2,872
Post-tax (1)		818		732		2,882		2,269
Director stock-based compensation expense
Pre-tax		122		121		352		379
Post-tax (1)		96		96		278		300

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

The Company had approximately $5,598,000 of unrecognized stock compensation expense at September 30, 2026 related to non-vested stock-based compensation granted, which it expects to recognize over a weighted-average period of approximately 1.9 years. The Company had approximately $316,000 of unrecognized director stock-based compensation expense at September 30, 2026 related to non-vested director stock-based compensation granted, which it expects to recognize over a weighted-average period of approximately 0.7 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 represent 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 did not grant any shares of restricted common stock during the three months ended September 30, 2026. The Company granted 19,435 shares of restricted common stock during the three months ended September 30, 2025, which had a weighted-average grant date fair value of $10.76. The Company granted 490,512 and 466,672 shares of restricted common stock during the nine months ended September 30, 2026 and 2025, respectively, which had a weighted-average grant date fair value of $10.94 and $11.48, 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		490,512		10.94
Less: Forfeited		6,436		11.28
Less: Vested		466,431		9.41
Outstanding as of September 30, 2026		594,426	$	10.92

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 during 2026 and 2025 as of the balance sheet dates, September 30, 2026 and December 31, 2025:


	2026			2025
Expected annual dividend yield		—	%		—	%
Expected volatility		87.19	%		88.51	%
Risk-free interest rate		4.12	%		3.87	%
Expected term	6 years			6 years

The expected annual dividend yield for options granted during 2026 and 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 granted 100,685 and 76,141 stock options for the nine months ended September 30, 2026 and 2025, respectively, which had a weighted average grant date fair value of $7.93 and $11.63 per share, respectively.

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		100,685		10.59		—		—
Less: Forfeited		—		—		—		—
Less: Expired		—		—		—		—
Less: Exercised		19,672		4.33		—		—
Outstanding as of September 30, 2026		1,046,743	$	5.64		5.99	$	3,554,000

Vested and Exercisable as of September 30, 2026		871,010	$	4.67		5.38	$	3,809,000

(1) Presented in ones.