NOTE 7 - EMPLOYEE AND DIRECTOR BENEFITS

Stock Incentive Plan

At March 31, 2026, the Company had a stock incentive plan as described below. The compensation cost that has been charged to earnings for the plan was approximately $796,000 and $864,000 for the three months ended March 31, 2026 and 2025, respectively.

The Company’s 2009 Amended and Restated Stock Incentive Plan authorizes the grant of up to 5,550,000 shares and allows for the issuance of Stock Appreciation Rights, Restricted Stock, Stock Options, Non-stock Share Equivalents, Performance Shares or Performance Units. The plan allows for the grant of incentive stock options and non-qualified stock options, and option awards are granted with an exercise price equal to the fair market value of the Company’s common stock at the date of grant. The maximum term of the options granted under the plan is ten years.

The Company estimates the fair value of each stock option award using a Black-Scholes-Merton valuation model, which incorporates the assumptions noted in the following table. Expected volatilities are based on the Company’s trading price history. The expected term for options granted is based on the short-cut method and represents the period of time that options granted are expected to be outstanding. The risk-free rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of grant.

There were no grants of stock options during the three months ended March 31, 2026 and 2025.

The following table summarizes stock option activity during the three months ended March 31, 2026 and 2025:

As of March 31, 2026, there were no unvested stock options.

Restricted Stock and Performance Shares

The Company periodically grants restricted stock awards that vest upon time-based service conditions. Dividend payments are made during the vesting period. The value of restricted stock is determined to be the current value of the Company’s stock, and this total value will be recognized as compensation expense over the vesting period. As of March 31, 2026, there was $7.1 million of total unrecognized compensation cost related to unvested time-based restricted stock. The cost is expected to be recognized evenly over the remaining 2.7 years of the restricted stock’s vesting period.

The Company periodically grants performance share units (“PSUs”) that give plan participants the opportunity to earn stock between 0% and 150% of the number of PSUs based on achieving certain performance metrics. The Compensation Committee determined that beginning with the grants in 2026, it would use the metrics of increase in tangible book value per share plus dividends, along with a relative TSR modifier, over a three-year performance period beginning on January 1^st of the year of the grant to determine the number of performance shares earned. These metrics were used to make grants to the participants in early 2026. As of March 31, 2026, there was $2.0 million of total unrecognized compensation cost related to non-vested PSUs. As of March 31, 2026, non-vested PSUs had a weighted average remaining time to vest of 2.7 years.